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Scottish and Southern plans to spend a total of GBP450 million over the next 10 years on renewable energy projects, according to Ian Marchant, finance director. This would put it in line with the U.K. government's target of sourcing 10% of power supplies from renewable energy by 2010. Some GBP200 million of the budget will go to refurbishing the company's 60 hydroelectric plants, which have a combined capacity of 1 GW. Refurbishment of the first six plants are underway. Most of the remainder of the renewables budget will be spent on new wind projects. The company was expecting to sign a construction contract to build a 13 MW wind project near Campbeltown, Scotland, last week.

Union Fenosa plans to spend 60% of its EUR4 billion capital expenditure budget over the next three years on increasing its presence in the domestic energy sector, Santos Vazquez, deputy general manager, told delegates. It has allocated 30% of the capital expenditure budget to international projects, most of which will be used to complete two combined cycle gas turbine projects in Mexico (PFR, 2/4). The Spanish company expects to complete construction of the Tuxpan III and IV power plants in 2003. The two facilities, located in the state of Vera Cruz, have a combined capacity of 938 MW.

InterGen's $426 million Magnolia construction loan opened for retail syndication last Wednesday, with leadsABN AMRO andCredit Lyonnais offering 50 and 35 basis points for commitments of $25 million and $15 million, respectively. The 10-year non-recourse loan, which funds construction of a 900 MW gas-fired plant near Memphis, Tenn., has 14 banks already committed following the wholesale round, which closed Dec. 9. (PFR, 12/23). "What ever they raise in retail is gravy," says one banker, referring to the strong commitment levels already in place.

Xcel Energy's plan to buy-out NRG Energy is likely to sharpen interest in NRG's $800 million corporate revolver that launched at a bank meeting last Wednesday. Initial upfront fees (PFR, 2/11) reflect the IPP's lower rating and even though NRG will remain a separately-rated entity, bankers looking at the deal are seeing an implicit upgrade. "You are taking triple-B minus risk and effectively converting it to triple-B," says one banker who is looking to write a commitment.

Minneapolis- basedXcel Energy is looking to consolidate its trading and marketing team with NRG Energy's operation, if the utility completes its planned takeover of the IPP (PFR, 2/4). But some observers think the cultural and technological issues that this will entail might impact trading, at least in the short term.

InterGen has postponed arranging and syndicating a $470 million non-recourse loan, which will be used to finance the construction of a $670 million natural gas-fired power plant in Sao Paulo, Brazil, until the first quarter of next year because of a delay in the state government's environmental permitting process. A project financier at InterGen in Coral Gables, Fla., says he expects the permitting issue to be resolved by the end of March, at which time it will hire a bank to advise on the financing. He declined further comment.

Lyle Miller, a managing director at Morgan Stanley in New York, also chose to compare utility mergers to courting. Miller told delegates European utilities might have an easier time wooing U.S. IOUs because as foreigners they seemed exotic to the incumbent players. At school the foreign exchange students may not have always been the prettiest girls, but they were certainly the most intriguing, joked Miller.

Richmond, Va.-based Dominion Energy is looking to build up its generation portfolio in Tennessee and expects to prosper from distressed selling in the region. Thomas Farrell II, ceo, told delegates that a lot of companies will shortly be looking to sell assets in the state and it hopes to pick up a few of these plants. A week earlier at the UBS Warburg utility conference in New YorkTom Caps, chairman, told PFR Dominion is involved in negotiations to acquire a coal-fired plant in Tennessee.

Power company executives, bankers and analysts gathered at Le Meridien Grovesnor House Hotelin London on Feb. 17-20 for the Edison Electric Institute's 3rd annual International Financial Conference. Executive Editor Victor Kremer and Managing EditorWill Aingerreport:

Endesa, Spain's largest electric utility, has scrapped plans to make any acquisitions in the U.S. power market and instead will focus on consolidating existing positions, according to equity analysts and bankers familiar with its global strategy. Market watchers say the move reflects Endesa's recent decision to cut back its expansion budget. "The company's balance sheet looks a bit stretched after acquisitions in Italy and France and it is now entering a period of consolidation," notes one London-based M&A banker.