International makes US power plant acquisitions
International Power Plc said on Monday that it had signed a deal to acquire 1,857 MW of power generating facilities in the USA.
Norwich Union International sales up 60%International Power said it was purchasing the plants from a subsidiary of Tenaska Power Fund, L.P. and an affiliate of Warburg Pincus LLC at a price of US$856.4 million (£439.2 million).
The plants to be bought are from the Pennsylvania, New Jersey and Maryland and Midwest Independent System Operator power pools.
Philip Cox, CEO of International Power said, "This acquisition of modern peaking plants in attractive power markets complements our existing portfolio of power stations in North America and improves further our ability to benefit from tightening reserve margins in the region. The acquisition is at a material discount to new build costs and is expected to deliver a strong return on investment."
International Power said that the transaction would be funded by non recourse project debt of $434 million (£222.6 million) and $461 million (£236.4 million) of equity. The acquisition is expected to be completed by the end of the third quarter.
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