UPDATE 1-Macquarie-led investor group buys DONG gas plant in UK

Tue Dec 10, 2013 7:50am EST

(Recasts, adds comment and background)

COPENHAGEN/LONDON Dec 10 (Reuters) - An investor group led by Macquarie on Tuesday purchased the Severn gas-fired power station in Britain from Danish utility DONG Energy, adding to a trend as investors snap up power plant assets in Europe.

Macquarie Group's Infrastructure and Real Assets division acquired the 832 megawatt power plant in Wales for 305 million pounds ($500 million), DONG Energy said.

The deal resulted in a loss before tax of 400 million to 500 million Danish crowns ($74-92 million) for DONG, it added.

The Danish utility, like many of its European peers, is divesting assets in a bid to survive in a weak European power market that has left them heavily indebted.

Most of Europe's gas-fired power plant owners have been losing money.

As utilities divest assets, a growing number of opportunistic investors are betting on a rise in power prices.

DONG Energy said last year it would sell 10 billion Danish crowns of non-core assets in 2013-14 and that it had shifted its focus to the growing offshore wind market.

"We have succeeded in divesting the Severn power station at a satisfactory price in a difficult market," Thomas Dalsgaard, executive vice president at DONG Energy, said in a statement.

The Severn power plant in Uskmouth in South Wales went into operation only three years ago and is one of Britain's most modern power plants at an 58 percent efficiency rate.

From next year, gas-fired power plants will be eligible to take part in government-led capacity auctions, which will from 2018 reward power plants for standing by to produce electricity when needed to complement intermittent renewable energy.

Macquarie also led an investment group that purchased EDF's Sutton Bridge gas-fired power plant in Britain, and trading house Vitol bought a huge British combined-heat-and-power plant in July.

($1 = 0.6103 British pounds) ($1 = 5.4375 Danish crowns) (Reporting by Teis Jensen and Karolin Schaps; editing by Keiron Henderson and Jane Baird)

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