The European Union announced Wednesday it will pay €40.5 million to help fund a renewable energy and water desalination plant in the northeast African country of Djibouti to supply approximately 200,000 people, EU Business News reported.

EU Development Commissioner Andris Piebalgs made the announcement while visiting Djibouti Prime Minister Dileita Mohamed Dileita

The plant, which has a total estimated cost of  €46 million, will be built near Djibouti’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."