UPDATE 1-Atlantic Power sells stake in Mid-Georgia power project

* To sell 50 pct stake to Sumitomo unit for $29 mln

* Sees book gain of $16 mln, tax gain of $12 mln from deal

Aug 18 (Reuters) - Canada's Atlantic Power Corp (ATP.TO) said it agreed to sell its 50 percent stake in the Mid-Georgia project to an indirect unit of Sumitomo Corp (8053.T) for $29 million and will use the proceeds to finance "accretive growth opportunities."

Mid-Georgia is a 308 megawatt dual-fuel, combined-cycle cogeneration project located in Kathleen, Georgia. The project's other 50 percent owner, Northern Star Generation LLC, has also agreed to sell its interest to Perennial Power Holdings Inc at the same time, Atlantic Power said.

Atlantic Power expects to record a book gain on the sale of about $16 million and a tax gain of about $12 million.

"Historically, Mid-Georgia has provided minimal adjusted EBITDA to Atlantic Power and was not expected to make cash distributions to the company for the next several years," Chief Executive Barry Welch said in a statement.

Last month, Welch said Atlantic Power would expand its renewable energy business in the United States, tapping into the incentives and tax credits the government has offered.

The company, which holds stakes in 15 electricity plants in major U.S. power markets, was looking to set up small-sized wind power and biomass projects in the country, CEO Welch had said. [ID:nBNG423051] (Reporting by Isheeta Sanghi in Bangalore; Editing by Gopakumar Warrier)