I Squared Capital-owned Atlantic Power & Utilities (AP&U) is selling its 50.15% interest in the Frederickson 1 Generating Station to North American wholesale power producer Capital Power Corporation for $100m (€95m).

TSX-listed Capital Power said it will hold its stake alongside Puget Sound Energy, which owns the remaining 49.85% interest in the US natural gas-fired generating facility.

The transaction, which will be financed using cash on hand and its credit facilities, is expected to close in the fourth quarter of 2023, Capital Power said.

Frederickson 1 is a 265MW natural gas-fired combined-cycle generating facility in Pierce County, Washington.

Avik Dey, president and CEO of Capital Power, said: “We are pleased to acquire this high-quality facility in the Pacific Northwest. Consistent with our mid-life natural gas strategy, this acquisition expands our portfolio of dispatchable assets in key markets that support the energy transition by providing reliable, affordable and flexible power while renewables grow and decarbonisation solutions develop.”

Bryan DeNeve, SVP, chief commercial officer of Capital Power, said: “Frederickson 1 is a strategically located mid-life natural gas asset in the growing load centre of the Puget Sound Region and will provide accretive near-term cash flows.

“The facility is supported by long-term contracts out to October 2030 with credit-worthy counterparties and is well positioned for re-contracting as a key dispatchable, baseload asset in the region. Additionally, the facility and adjacent lands provide ample room and infrastructure for future non-emitting, flexible generation developments co-located with the facility.”

To read the latest edition of the latest IPE Real Assets magazine click here.