Dynegy in US Power Plant Venture

9 August 2009 (Last Updated August 9th, 2009 18:30)

Power generation company LS Power Associates L.P. is expected to make an announcement today that it will buy nine US power plants from one-time development partner Dynegy. LS Power will pay about $1bn and return nearly $500m in shares to Houston-based Dynegy, sources have told the Wall

Power generation company LS Power Associates L.P. is expected to make an announcement today that it will buy nine US power plants from one-time development partner Dynegy.

LS Power will pay about $1bn and return nearly $500m in shares to Houston-based Dynegy, sources have told the Wall Street Journal.

The deal effectively unwinds a 2006 joint venture with the aim of creating the largest new developer of coal-fired power plants in the US, the paper reports.

Over the past year, the recession has shrunk both the country's power-generating needs and developers' financial ability to build plants. Dynegy, which is a wholesale power generator, has been especially hard hit.