AMP is already a partner in several Aquila's major regional investments and has pre-emptive rights over these assets.

Aquila (fomerly known as Utilicorp) will join a long list of foreign companies now exiting Australia's power market with about $10 billion worth of assets now on the market.

Many in the market believe AMP will use the consolidation of Aquila's assets as the core of a new vehicle which would be the largest listed energy fund in Australia.

Aquila on the other hand is under pressure at home after delivering a 40 per cent slump in first-quarter earnings and its share price losing about half its value over the past 12 months.

Aquila, which is owned by a couple of billionaire brothers, has indicated it would sell about $US500 million in assets over the next 12 months.

Industry watchers believe other potential bidders for the assets include the Macquarie Essentials Infrastructure Group as well as the ANZ.