Genesis Energy will pay $821 million for the two Tekapo power stations and the canal system linking them in the South Island.

The purchase price was revealed in details of a bond offer aimed at raising $225 million, with provision for oversubscription of up to $50 million.

Bank debt and existing cash would be used to fund the balance of the Tekapo deal with fellow taxpayer-owned company Meridian Energy.

The deal is part of electricity sector reforms aimed at encouraging more competition among power companies.