The AES Corporation (NYSE:AES) announced today that Indiana regulators have approved the construction of two natural gas projects totaling 850 MW of generating capacity.

The Indiana Utility Regulatory Commission (IURC) gave the thumbs-up to AES' Indianapolis Power & Light (IPL) subsidiary to build a 650 MW combined-cycle gas turbine power plant, as well as convert two current coal-fired units totaling 200 MW to natural gas power, according to the company.

Project costs are expected to clock in around $636 million, but AES President and CEO Andrés Gluski was quoted in the press release as saying it is necessary to expand and improve AES' current generation fleet. "This significant milestone demonstrates our continued ability to develop and invest in attractive platform expansion opportunities," said Gluski in today's press release. "Including this CCGT [combined-cycle gas turbine] project at IPL, in the past six months, we have received final approvals for, or reached financial closing on approximately 2,600 MW of expansion projects in the United States, Chile, India and Panama, which will come on-line and contribute to our earnings and cash flow growth in 2015 through 2018."

AES plans to fund the projects with 45% equity and 55% debt. The two converted units are expected to be operational by early 2016, while the CCGT plant should be powered up in 2017.

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