Local financial news services estimate the cost of the energy strategy at €3.6 billion ($A5.4 billion), with the expectation of more than 2500 new jobs being created.

New mandatory targets for energy efficiency, emissions reductions and use of biofuels are expected to create a regulatory framework that will encourage investment in renewable energy projects, ranging from wave, wind and biomass.

Australian-based nternational investment group Babcock & Brown are already active in the region with the recent $A1.5 billion acquisition of Portuguese renewable energy company Enersis.

Jornal de Negocios Online has reported that Malaysian company Agni Incorporated intends to invest €65 million in the construction of a fuel cell battery plant in Portugal by 2009.

Portugal is considered one of the most oil-dependent members of the European Union, with 58% of its energy derived from oil.

The Government has also announced it intends to implement wider adoption of biofuels in its fleets and public transport services.