Mitsui looks to sell stakes in UK power assets - sources

* Rothschild managing sale process - sources

* Engie (LSE: 0LD0.L - news) owns remaining stakes in assets (Adds details, background)

By Sarah McFarlane and Karolin Schaps

LONDON, April 14 (Reuters) - Japan's Mitsui & Co is looking to sell its stakes in UK power assets including First (Shanghai: 603806.SS - news) Hydro Company and four fossil fuel plants, two sources familiar with the matter said on Thursday.

A Mitsui & Co spokesman declined to comment.

The sources said Mitsui had mandated Rothschild to manage the sales.

Rothschild declined to comment.

Mitsui owns 25 percent of assets including First Hydro, which has two hydropower plants in Wales, along with gas power plants Deeside and Saltend, the Indian Queens fuel oil plant and the Rugeley coal plant which will cease operating this summer.

French gas and power group Engie owns the remaining 75 percent stakes in the assets.

Engie declined to comment on whether it would be interested in buying Mitsui's stakes.

One source estimated the total value of the assets at about 1 billion pounds, meaning Mitsui's stakes would be worth some 250 million pounds. The source said the deadline for bids was in the next couple of weeks.

Gas-fired power plants have been operating with weak or even negative profit margins in Britain as growing renewable energy production has made them less competitive.

A carbon tax, introduced in 2013, has made coal-fired power generation less competitive in Britain, due to its higher carbon emissions compared with other fuels.

First Hydro, Saltend and Indian Queens power plants all secured capacity auction contracts for the winters of 2018 through 2020, giving future owners the certainty of revenue over those periods. (Additional reporting by Osamu Tsukimori in Tokyo; editing by David Clarke)