Abu Dhabi, Canada funds to jointly bid £5 billion for EDF UK network

The sovereign wealth fund of Abu Dhabi and Canada's largest pension fund have teamed up to make a £5 billion joint bid for French energy giant Electricite de France's (EDF) electricity distribution network in the UK.

"One of the world's largest sovereign wealth fund, the $627 billion Abu Dhabi Investment Authority (ADIA) is teaming up with Canada's biggest pension fund, the $106 billion Canada Pension Plan (CPP)," the Telegraph Co UK said yesterday citing sources.

EDF Energy, the largest electricity distribution network operator in the UK, is majority owned by the French government.

In October, EDF Energy had said it planned to hive off the electricity business that distributes power to nearly 8 million homes in the east and south-east of England in order to reduce its debt by at least €5 billion by the end of 2010 from the current £22.3 billion.

This hefty debt has been incurred by the company when it acquired British Energy for $23.18 billion in September (See: EdF to acquire British Energy for $23.2 billion) and bought a 49.9 per cent stake worth $4.5 billion in a major American nuclear operator, Constellation Energy in December. (See: EDF Group acquires controlling stake in US nuclear giant Constellation Energy)

It has appointed Deutsche Bank, Barclays Capital and BNP Paribas to run the auction.