German utility EnBW Energie Baden-Wuerttemberg AG (EBK.XE) and the German unit of Dow Chemical Co. (DOW) Wednesday said they've decided to abandon a plan to jointly build a large power plant at Dow's production site in the northern German town of Stade.

In a joint statement, the companies said the cooperation will be abandoned for "various reasons."

"The project was technically mature and EnBW had the necessary financing in place to realize the project," said a spokesman for Germany's third-largest utility.

However, he said that the cooperation was abandoned due to "changed general economic conditions".

In terms of the cooperation, announced in early 2008, both companies would have jointly built a coal-fired and combined cycle gas turbine power plant with more than 1,000 megawatt generation capacity to secure Stade's chemical plant's long-term energy supply.

The companies never disclosed an estimated investment volume for the project, but power plants of this size usually cost more than EUR1 billion.

A person familiar with the matter said the cooperation was abandoned due to the sharp deterioration of Dow's credit ratings. Earlier this year, Standard & Poor's Ratings Services downgraded Dow's rating to junk level following the company's debt-financed $16.3 billion acquisition of Rohm & Haas. Moody's Investor Service downgraded Dow to the brink of junk territory after the transaction.

A spokesman for Dow Deutschland declined to elaborate on the reasons for ending the cooperation. He added, however, the chemicals company will continue to pursue its plan to build the power plant, given that "a long-term energy supply is vital for us".

Dow will now pursue the plan on its own, but preferably with a new partner, he said.

Company Web sites: www.enbw.comwww.dow.com

-By Jan Hromadko, Dow Jones Newswires; +49 69 29 725 503; jan.hromadko@dowjones.com