Israel’s electricity firm OPC Energy plans to acquire US-based electricity generation company Competitive Power Ventures (CPV).

The company has produced a letter of intent (LoI) for the deal, requiring an investment of $700m to $800m. Part of the purchase price will go towards CPV’s future projects.

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Headquartered in Boston and Washington, CPV is a private electricity generation company. It has initiated and established power plants with a total capacity of about 14.8GW, of which nearly 4.85GW is wind energy.

In addition, the company has acquired projects with approximately 6.2GW of capacity. Of this, approximately 2.245GW is in renewable energy, with approximately 1.1GW capacity of renewable energy projects in advanced stages of development.

OPC Energy CEO Giora Almogi said: “We have long recognised the potential inherent in the US electricity market, with an emphasis on expanding operations into the field of renewable energies. We see the US as one of OPC’s strategic target markets.

“There is growing momentum for increased development of renewable energy and a focus on a lower carbon approach to the electricity supply.

“In parallel, the trends continue with a modernization of the grid with coal and uneconomic nuclear assets being retired and the construction of efficient, highly flexible natural gas power plants for economic and environmental reasons.”

With the proposed acquisition offer, OPC aims to expand its power generation operations in the US and also enhance CPV’s operations, primarily in the field of ‘green electricity’.

Almogi added: “We have been working for the past year to find a suitable platform to enter the American market, with one of the important criteria being that the American company has strong management with proven experience, and has accumulated significant projects for continued growth.

“After completing an in-depth search process, as mentioned, we are pleased to report today a letter of intent for the acquisition of CPV.”

The deal is subject to a number of approvals as well as the completion of the negotiation process between the parties.

OPC said its holding in the acquired company may stand at approximately 70%. The company is in negotiations with the Israeli institutional and financial partners Clal, Migdal, and Poalim Capital Markets for the remaining stake.