International Power made its first major purchase of electricity generating plant in the US yesterday, paying $1.14bn (£640m) for a coal-fired station in Texas.
The acquisition of the 632-megawatt Coleto Creek station, from a consortium including the American private-equity firm Carlyle, will increase the UK company's generating portfolio in the US to more than 5,000 megawatts - equal to about 30 per cent of its capacity.
The deal is the biggest since the £2.8bn purchase by International Power and Mitsui of Edison Mission in 2004. The Coleto Creek acquisition will be funded largely through a £525m debt facility provided by Credit Suisse and Goldman Sachs. International Power will put £162m ofcash into the deal.
The bulk of International Power's US generating capacity is in Texas, where it operates 3,000 megawatts of gas-fired plant. Phil Cox, the chief executive, said the group had been keen to acquire coal-fired capacity to increase its fuel diversity. Across the group, coal accounts for about one-quarter of the company's generating capacity.
International Power also has power stations in New England, Georgia and Puerto Rico although Europe, with 5,800 megawatts of capacity, remains its biggest market.
Mr Cox said International Power was in the early stages of looking at whether to build "clean-coal" power stations in the UK, but had no firm plans as yet, unlike E.ON and RWE, which have announced an intention to construct such stations.Reuse content