UPDATE 1-Canada's wind power company to acquire US developer

* Equity deal to give Wind Works rights to 400 MW projects

* Value of transaction not disclosed

* Financing required to prepare projects for construction

By Pav Jordan

TORONTO, Oct 28 (Reuters) - Canada's Wind Works Power Corp (WWPW.OB) R5E1.F said on Wednesday it agreed to acquire Zero Emission People LLC, a closely held U.S. company, in an all-equity transaction giving it the rights to develop wind power projects with a capacity of more than 400 MW.

Wind Works intends to form a new company with the assets, Chief Executive Ingo Stuckmann said an interview. It will need some $20 million to prepare the projects for construction.

The value of the deal was not disclosed by Wind Works.

It will cost another $1.2 billion to build more than 10 projects in Europe, Canada and the United States, each producing anywhere from 10 MW to 200 MW, although the company may sell projects before the construction stage begins.

Stuckmann said Wind Works aims to be a leader in global wind energy, an industry he estimates will attract $500 billion in investments over the next decade.

"We have a three-phase approach to start with, starting with a relatively quick project in Germany, highly predictable Ontario projects and a third phase of large projects in the United States," he said by telephone from Germany.

To do that the company needs to raise cash quickly, and Stuckmann said investor appetite has proven healthy so far.

"We want to raise the first $10 million in the next 12 months," said Stuckmann, adding that the new company would raise initial cash through a private placement and on stock markets. It is listed on an over-the-counter basis in the United States and Frankfurt.

"We'll then increase probably to $50 million in the mid-term," he told Reuters in an interview.

TORONTO, NEW YORK

Stuckmann said the company planned to list in Toronto within three to six months and predicted a New York listing within a year.

Wind Power is one of the world's fastest-growing energy sources and industry players say the market will quadruple in size in the next 10 years, driven in part by new green energy policies around the world.

Canada's wind energy sector aims to supply 20 percent of the country's electricity by 2025, from less than 1 percent these days.

The plan in the United States is even more ambitious, with wind energy seen supplying 20 percent of electricity by 2020.

Setting up a wind farm is not as straightforward as putting up giant wind turbines. It requires large swathes of land -- on average 100 acres per turbine -- with adequate and relatively constant wind speeds and which are close to consumers and an authority that is prepared to enter long-term power agreements.

It also requires capital -- some $3 million for each MW of energy capacity produced.

"We've done this before, now we just want to do it with a bigger cash backing," said Stuckmann, who over the past decade developed some 1,500 MW worth of wind power in U.S. and European markets, which he sold for about $3 billion.

John Pennie, chairman of Wind Works Power, said in a separate interview that the new company will vary its strategy according to country and project.

He said the new company could either enter partnerships, sell assets while retaining a 10 or 20 percent carried interest, or raise capital by issuing stock.

Once listed in Toronto, the company will go head to head with Canadian Hydro Developers KHD.TO, which last month agreed to acquire the rights to a 4,400 MW offshore wind prospect in Ontario from Wasatch Wind, Inc., a private U.S.- based renewable energy company.

($1=$1.07 Canadian)

(Reporting by Pav Jordan; Editing by Frank McGurty)