The plant, which will be co-located with the 2,060 acre Giant King Grass plantation project in Nicaragua, will be owned and operated by the special-purpose company Energia Reino Verde.
The facility will be capable of producing 84 million kWh of electricity per year for 25 years.
Energia Reino president Amilcar Ybarra-Rojas said: "Our Giant King Grass biomass power plant will be an important renewable and clean source of reliable base electricity for Nicaragua.
"It will complement the intermittent wind electricity, and the seasonal sugarcane bagasse electricity and hydroelectricity in our country. It will help reduce our reliance on electricity generated from oil."
The biomass facility is capable of producing 84 million kWh of electricity each year, once commissioned, for 25 years, reports SeeNews Renewables.
Viaspace owns a 50% stake in Energia Reino Verde while investors and executives of Agricorp hold the remaining 50% interest.
Viaspace CEO Dr Carl Kukkonen said: "We received substantial assistance in the proposal evaluation and negotiations from the team at Pelican SA, which conducted the formal feasibility study for the project, and from experienced power plant operators in Nicaragua, and our attorneys."
Viaspace chairman Dr Kevin Schewe said: "Completing the EPC selection process, along with the detailed negotiations and signing the agreement has been a significant step forward to making the 12 MW VIASPACE Giant King Grass fueled power plant a reality.
"We have been very cost-conscious with the overall ERV project design and have conducted this process in a way that we can replicate it again in Nicaragua or elsewhere and create ‘economies of scale’ for future projects."
