US electricity provider Calpine has agreed to sell its Saltend power plant to a consortium of International Power and Mitsui & Co for GBP500 million as it continues a program to reduce its debts.

Calpine, one of the largest producers of electricity in the US, is to divest itself of the 1,200 megawatt gas-fired Hull plant, the last one it owns in the UK, in order to reduce a debt which stands in the multi billions of dollars. The sale agreement closely follows a number of similar deals that Calpine has agreed for some of its power facilities in the US.

According to their agreed association, on completion of the purchase, UK based International Power will own 70% of the plant, while Japanese company Mitsui & Co will own 30%. For its share International will pay GBP150 million. Mitsui’s portion of the power facility will cost it GBP65 million. The remainder of the purchase price will be covered by a consortium of banks financing the deal.

Saltend is a modern, efficient plant, and will be earnings enhancing in the first full year of ownership and immediately cash generative, International Power chief executive Philip Cox said in a statement.