Meridian Energy is taking a 50 per cent share in the development of a Victorian wind farm estimated to cost around $A1 billion ($1.26b).

The state-owned electricity generator is a joint venture partner with Australian generator AGL in what is being described as the southern hemisphere's biggest wind farm.

Meridian said its 50 per cent investment share in the 420MW (megawatt), 140-turbine, Macarthur project in southwest Victoria would be made through a combination of equity and project finance.

Meridian chief executive Tim Lusk said his company's investment was consistent with its Australian wind investment strategy, which earlier this year saw the company acquire the 70MW Mt Millar wind farm in South Australia.

"The Macarthur project is a great opportunity to facilitate our growth ambitions in Australia. The project offers long term, reliable generation revenues which will complement the rest of Meridian's developing Australian wind portfolio," Lusk said.

"The electricity purchase contracts have been structured in a way that the joint venture does not take market price or electricity production volume risk."

Recent changes to Australia's Renewable Energy Target legislation - obliging retailers to obtain a fixed proportion of their overall energy sales from renewables - gave Meridian and AGL added confidence in the commercial viability of the project, Lusk said.

"Wind generation currently has a substantial cost advantage over other grid scale renewable technologies that can be practically deployed in Australia."