A consortium that includes Canada Pension Plan Investment Board (CPPIB) and led by Energy Capital Partners is buying Calpine Corporation for US$5.6bn (€4.77bn).

CPPIB said it had agreed to join the consortium to take over Calpine, one of the largest independent power generators in the US.

Headquartered in Houston, Texas, Calpine has 80 power plants in operation or under construction with the capacity to generate approximately 26,000 megawatts of electricity from geothermal and natural gas resources.

CPPIB said this was capable of powering approximately 20 million homes.

Calpine’s 13 geothermal geyser assets in northern California are one of the largest sources of renewable energy in the state.

The company also sells electricity to residential, commercial and industrial customers through the Calpine Solutions and Champion Energy retail platforms.

Avik Dey, managing director and head of natural resources at CPPIB, said: “This investment aligns well with our strategy to expand our natural resources portfolio to include power and renewable assets.

“Calpine owns and operates one of the most efficient fleets of natural gas power plants in the US, serving critical markets in California, Texas and the Eastern US.

“Coupled with the reliable generation of renewable geothermal energy, Calpine’s modern approach to energy production is ideally positioned for ongoing success.”