£5bn energy auction lures Abu Dhabi team

The £5 billion auction of the UK's biggest electricity network has drawn interest from a bid team featuring one of the world's largest sovereign wealth funds, it was reported today.

French power giant EDF has put 100,000 miles of electrical network across London, the South East and eastern England - which connect to eight million homes - up for sale to reduce its debts.

The Canadian Pension Plan (CPP) has teamed up with the Abu Dhabi Investment Authority (ADIA) to mount a possible bid for the business, the Sunday Telegraph reports.

Estimates of the ADIA's assets under management range from £219 billion up to £400 billion, although the fund has never published the details.

The ADIA will be a minority partner if any firm approach is made, although the deadline for initial bids is still some two months away.

Other would-be participants in the auction are said to be a pairing of Scottish & Southern Energy and Canadian pension fund Borealis, National Grid and Asian investment fund Cheung Kong Infrastructure.

Long-term investors such as pension funds are attracted to assets such as utilities and power distribution networks due to their reliable income stream. Several such companies changed hands before the credit crunch struck.

EDF, which owns the network through its UK subsidiary EDF Energy, bought British Energy for more than £12 billion last year and wants the sale to cut five billion euro (£4.6 billion) from its debts by the end of 2010.

The CCP was unavailable for comment, while the ADIA declined to comment.