Capital Power, a Canada-based independent power producer, has reached two separate deals with CSG Investments to acquire two natural gas-fired power plants in the US, for a total price of $1.1bn.

Under the definitive agreement, the company will purchase a 100% interest in CXA La Paloma, a company that owns the 1.06GW La Paloma natural gas-fired generation facility in Kern County, California.

The second power plant is the 1.09GW Harquahala natural gas-fired generation facility in Maricopa County, Arizona, which is owned by New Harquahala Generation Company.

The Harquahala facility will be acquired under a 50-50 partnership between Capital Power Investments and an affiliate of a fund managed by BlackRock’s Diversified Infrastructure business.

Under the partnership, Capital Power and BlackRock will each provide 50% of funding to acquire the project.

Capital Power will also handle operations and maintenance along with asset management of the Harquahala facility. It will secure an annual management fee for this work.

The deals add a total of nearly 1.6GW to Capital Power’s portfolio of about 7.5GW of power generation capacity spread across at 29 facilities in North America.

Capital Power president and CEO Avik Dey said: “Capital Power’s acquisition of La Paloma and the partnership in Harquahala’s gas generation assets marks a significant milestone in our strategic growth. These plants are well positioned to bolster our current portfolio and align with our commitment to providing reliable, affordable power solutions that support a balanced approach to the energy transition.

“This acquisition further unlocks an interesting market opportunity in WECC, where we can play a leading role in supporting the shift to low-carbon energy solutions through offering reliable generation while we grow our own renewables fleet. Lastly, this transaction underscores our dedication to delivering long-term value to our shareholders and advancing our position as a leader in the power generation sector.”

Scheduled to complete in the first quarter of next year, the transactions await regulatory clearances.

Capital Power stated that the deals align with its plan to own contracted gas-fired power plants that are placed strategically within their markets and can bring additional growth to the company.

After the deals are completed, Capital Power is expected to operate fifth largest fleet of non-regulated gas-fired power plants in North America, with footprint across the US and Canada.

Capital Power plans to raise a total of $400m in subscription offering to fund the acquisitions.

Of the total amount, $300m will be public bought offering and the remaining $100m will be a private placement to AIMCo.

Last month, the company acquired a 50.15% stake in the 265MW Frederickson 1 generating station from Atlantic Power & Utilities, for $100m.

The gas-fired combined-cycle power plant is located in Pierce County, Washington and has been operating since 2002.