Taqa is 75 per cent owned by the government of Abu Dhabi, and is one the vehicles used by the emirate to invest oil export revenues. Abu Dhabi leads the UAE and holds most of its oil wealth.
The purchase gives Taqa 1,150 megawatts (MW) of power generation capacity in Jamaica, Trinidad and Tobago and Curacao, the company said in a statement. It takes the total power generation assets Taqa holds worldwide to 11,650 MW.
A Taqa spokeswoman declined to give a value for the deal, which it expected to close at the end of the first quarter 2009.
The Abu Dhabi-based firm will fund the deal through equity and debt, the company said in comments emailed to Reuters.
This is Taqa's first investment in the Caribbean, and follows several investments in North America. Taqa hoped the deal would provide a springboard for more investment in the region.
"We anticipate our joint venture in the region will act as a platform to explore multiple opportunities, beyond the downstream segment, which may assist in creating a more sustainable environment for oil-dependent Caribbean countries," Taqa said in the statement to Reuters.
Taqa bought a majority stake in a US power plant in December with RBS Sempra Commodities.
The UAE company wants to transform itself into an integrated international energy company after starting out in 2005 as an Abu Dhabi utility. It aims to almost triple assets to $60 billion (Dh221 billion) by the end of 2012 from around $23 billion it held late last year.
The UAE is the world's fifth-largest oil exporter.