The European Union said Wednesday it will pay for most of a combined renewable energy and water desalination plant in Djibouti, to supply some 200,000 people, a quarter of the country's population.

EU Development Commissioner Andris Piebalgs made the announcement with visiting Djibouti Prime Minister Dileita Mohamed Dileita, agreeing to provide some 40.5 million euros of the 46-million-euro cost.

The plant will be built near the northeast African country's capital, home to three-quarters of Djibouti's people and where water supply is less than half that required.

"Access to water is a human right and it's unacceptable that insufficient water supply can be a source of conflict, as Djibouti recently experienced," Piebalgs said.

"With this new project, we are not only increasing access to water for the people but we also help to bring security and stability for all Djiboutians."