A revolution occurring in the world’s electricity supply can help power investor returns even through a recession, according to Co-operative Insurance (CIS).

Andrew Moffat, who manages the CIS UK Income with Growth Trust, believes that companies developing new generation plants in emerging countries such as China and India can continue to grow despite an economic downturn due to rapid growth in demand for power. There are equal opportunities in western countries where ageing infrastructures need to be replaced and environmental legislation continues to bite.

Power groups addressing this future supply shortfall have the potential to deliver strong performance, and Moffat cites both International Power and Scottish & Southern Energy as two companies that illustrate the opportunity for growth.

Moffat said: “Power companies are not dependent on economic growth in the same way as consumer stocks, so can deliver performance even in the event of a recession.

“International Power is benefiting from the worldwide energy problem. It already keeps the lights on in 20 countries and is developing its business in emerging economies where supply is struggling to keep pace with demand.

“While Scottish & Southern Energy is committed to improving efficiency at its power generation plants in the UK as well as growing its wind power business in line with the Government’s drive to boost energy from renewables.”

The CIS UK Income with Growth Trust is currently ranked second in the UK Equity and Bond sector over four years. It aims to deliver above-average total return performance combining capital growth with an attractive yield. It has a total return of 71.6% for four years to 31 December 2007, significantly above the 50.2% achieved by the UK Equity & Bond sector, and ahead of the 69.3% return of the FTSE All-Share Index.

Both International Power (209.4%) and Scottish & Southern Energy (112.18%) have more than doubled the performance of the FTSE All Share (50%) over the three years to 31 December 2007.