St. Louis, Mo.-based Peabody Energy (NYSE: BTU [1]) said today it joined China's GreenGen project, a near-zero emissions coal-fueled power plant under development in the country.

Peabody is the only foreign investor in the $1 billion project, with a 6 percent stake. Peabody did not disclose financial terms of the investment.

"Peabody is honored to represent the rest of the world in China's most important climate initiative," said Peabody chairman and CEO Gregory Boyce.

"GreenGen joins other important carbon initiatives involving Peabody on several continents, including the Coal21 program in Australia, FutureGen in the United States, and the Asia-Pacific Partnership."

Led by managing partner China Huaneng Group, the group will design, develop and operate an integrated gasification combined cycle power plant near Tianjin, southeast of Beijing.

Huaneng is also a member of the FutureGen Alliance, a partnership with the U.S. Department of Energy to develop and site a 275-megawatt technology prototype that also would achieve near-zero emissions with carbon capture and storage.

For the GreenGen plant, a 250 megawatt plant will be built in the initial phase, expanding to 650 MW in later phases.

Construction is expected to start in early 2008, with the first phase of the plant expected on line by 2009.

The later phases will also include carbon capture.