SEOUL (AFP) - South Korea has opened the world's largest garbage-fuelled power plant and expects to reduce its imports of heavy oil by 500,000 barrels a year as a result, officials said Wednesday.

The 50-megawatt plant, designed to provide power to more than 180,000 households, began operating on Tuesday. It sits on a mammoth garbage dump in the city of Incheon west of Seoul, the ministry said in a statement.

For fuel, it uses only the methane gas naturally generated from the decomposing garbage on the site.

"It reduces greenhouse gas emissions by burning away methane and avoids burning more fossil fuel for electricity," Park Han-Eop, an official of the ministry's waste treatment division, told AFP.

The plant will save the country the import of 500,000 barrels of heavy oil and will reduce greenhouse gas emissions by 1.37 million tons per year, he said.

A private firm, Eco Energy, invested 77 billion won (83 million dollars) in building the power plant in return for operating it for 11 years before handing the commercial rights over to the government, he said.