Npower lined up for sale to Spanish by parent RWE

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One of the nation's major energy suppliers, Npower, may be sold by the German giant RWE, reports over the weekend suggested, in a deal worth £5bn. RWE is said to be thinking about the move because it needs to relieve itself of debts, and to pay for a strategic commitment for it to invest in a new generation of "green" power stations – but also because of "dissatisfaction" with British energy policy, say sources.

Spanish power group Iberdrola is a likely buyer for Npower, which employs 11,000 people and supplies electricity to about 6.8 million homes in Britain, newspapers said, citing insiders.

Npower made profits of £245m on sales of £7bn last year. RWE has hired Goldman Sachs to review Npower's future. Formerly Innogy plc, and before that part of National Power, Npower was bought by RWE in 2002 for £5.2bn.

The Government is reviewing its energy policy with the aim of encouraging more investment in nuclear and wind power, and to penalise older fossil-fuel plants.