La Paz, May 18 (EFE).- The government has hired Spain's Isotron SAU, a unit of Isastur, to build Bolivia's first solar power plant in Pando, a northern region on the border with Brazil and Peru, officials said.

The contract was signed Saturday by representatives of state-owned Guaracachi and Isotron at a ceremony in Cobija, the capital of Pando.

President Evo Morales and Hydrocarbons and Energy Minister Juan Jose Sosa, as well as regional and local officials, attended the signing ceremony.

Morales said in an address that his administration was "happy" to be "working well" with many Spanish companies, citing oil company Repsol, a partner of state-owned oil company YPFB in different energy projects.

"Some have also defrauded us. In (the case of ) Sabsa, for example, we regrettably had to nationalize," Morales said.

Sabsa was a unit of Abertis, a company that managed Bolivia's three largest airports and was nationalized in February 2013, with officials arguing that the firm failed to fulfill its infrastructure investment commitments.

Pando is one of two Bolivian regions that are not part of the national grid, generating electricity with diesel-powered turbines, Sosa said.

The current power grid serves about 45,000 residents in Cobija and the towns of Puerto Rico and Porvenir, with total demand at 9 MW.

The $11.8 million solar power plant will have a generating capacity of 5 MW, covering "more or less 50 percent" of demand in the three towns, Sosa said.

The utility will no longer need to consume 20 million liters annually of diesel, saving $3 million.

Denmark is paying for half of the power project, while Bolivia's government is covering the rest of the cost.

The solar power plant is expected to begin generating 2 MW of electricity in September, with the rest of its capacity coming online two months later