Covanta has entered into an agreement with Electricity Generating PCL (EGCO) to divest all of its interests in the Quezon coal-fired electric generation project.

Under the agreement, Covanta will pay $215m to EGCO, which is a current partner in the project.

Covanta’s president and CEO Anthony Orlando said that Quezon is a world-class asset and the valuation reflects its strong potential going forward.

The sale is expected to close in the first quarter of 2011, and the transaction is anticipated to generate a one-time after tax book gain of about $140m at closing, according to Covanta.

Quezon is the first sale after Covanta announced its plans to divest its equity interests in four fossil fuel facilities in the Philippines, India and Bangladesh during June 2010.