State-controlled Finnish utility Fortum has agreed to sell its local power distribution grid to a group of institutional investors led by First State Investments and Borealis Infrastructure for €2.55 billion.

While the higher-than-expected offer from the consortium excited investors, some Finnish politicians expressed opposition, saying that foreign ownership would lead to higher utility bills for consumers.

The deal is the latest in a series of regulated grid sales made by large energy firms wanting to cut debt and focus on power generation instead.

At the same time, it highlights the increasing popularity of established infrastructure assets for pension funds and other investors seeking relatively safe and assured returns in a low interest rate world. Shares in the company were up 3.6 per cent at €17.44. – (Reuters)