International Power, the British-based power generator, is expected today to submit a joint bid with Suez, the French power giant, to build and run a $3 billion (£1.4 billion) natural-gas-powered power and water plant in the United Arab Emirates.

International Power would say only that it had been considering the project, which would be the latest of its kind in the Gulf, for some time and declined to comment on who its potential partners would be.

The competition to build the power plant is being run by the state-owned Abu Dhabi Water & Electricity Authority, which has asked the two power groups to submit proposals today.

The proposed project is to build a 1,600 megawatt power station and a 100 million gallon-a-day desalination plant.

Middle East states, flush with cash from high oil prices, are spending billions of dollars on new infrastructure and industrial projects to diversify their economies and create jobs for their fast-growing populations.

International Power has a growing presence in the Middle East, where it operates a number of substantial power stations under contract and is developing others.

The power group, which used to be part of the state-owned National Power, reported a 12 per cent rise in profit for the first nine months of its financial year today and said that it was confident for the full year.

It said: “Financial performance in the nine months has been impacted by mild weather in North America and by the effects of drought in Australia.

“Despite the continuing impact of interregional pricing differentials in Australia, we remain confident that overall 2007 will be a year of further growth.”

Profit from operations was £634 million, in the nine months to 30 September, compared with £564 million a year earlier.

In North America, profit from operations rose by a third to £104 million, but in Australia it was down by a third at £66 million because of an unplanned outage at its Hazelwood unit and adverse interregional pricing, exacerbated by the present drought.

Profit rose 22 per cent in Europe to £377 million, on the back of higher power prices.

Philip Cox, the chief executive, also outlined the company's plans to increase the size of its wind-farm portfolio.

The company began buying wind farms this year, with facilities in Italy, Germany and the Netherlands, and already has 1096 megawatts of wind.

Mr Cox said that Europe would be the focus of growth for its renewables business, because of a supportive market framework for green energy investment.

He added: "The UK is certainly now on our agenda. It has been quite a difficult environment to get sites permitted and then built.

"But from a regulatory point of view, yes, we are interested in the UK.”

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