I Squared Capital has purchased the Irish power company Viridian for $1.1bn in a deal which could see the US infrastructure fund eventually entering the UK market.

The fund which owns renewable energy assets in the US and India, and Viridian, an integrated utility spanning the Republic of Ireland and Northern Ireland, will announce the deal on Tuesday.

Viridian provides 20 per cent of domestic energy supply across Ireland, and owns gas-fired power stations and wind farms.

A partner at I Squared, Gautam Bhandari, told the Financial Times the company would actively consider entering the UK market, challenging the existing ‘Big 6.’

“It’s a buyer’s market at the moment. There is a need for new contenders in the UK power market, where customers are looking for solutions other than the Big Six.”

I Squared will also consider buying energy generation assets in the UK and has an additional €1bn to spend on further deals.

Last year Viridian made a pre-tax loss of £13m on sales of £1.5bn. Although the company made an operating profit of £112m, it was pushed into the red by £152m of financing costs.

Mr Bhandari said I Squared will pay down £145m in debt once the deal completes.