Massachusetts, US-based electricity and gas utility NSTAR is selling its wholly-owned subsidiary, Medical Area Total Energy Plant (MATEP), to a joint venture comprising district energy company Veolia Energy North America and Morgan Stanley Infrastructure Partners.

MATEP’s principal asset is a cogeneration plant that produces electricity, steam and chilled water, and a distribution system that delivers these products to its customers. The company provides heating, chilled water service and electricity to several hospitals, medical research and biotechnology centres and teaching institutions in the Longwood Medical Area of Boston. The two companies have agreed to buy MATEP for approximately $320 million in cash, pending necessary regulatory approvals.

Once the acquisition has been approved, Veolia Energy, which has a minority ownership interest in the joint venture, will assume responsibility for MATEP operations. The company operates the largest portfolio of district energy (heating, cooling and cogeneration) networks in the US, with systems in the central business districts of 14 cities across the country.