Northland Power Income Fund said it will spend $145m to build a natural-gas-fired power plant in Saskatchewan, Canada.

The income trust said it has signed a 25-year power purchase agreement with Saskatchewan Power Corp. to provide peaking power, according to the Canadian Press.

The 86MW plant will be built near Spy Hill, Saskatchewan, about 200km east of Regina.

Construction is expected to begin in June 2010. Commercial operations are set to begin no later than December 2011.