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Vattenfall sells German power grid

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11:37 CET+01:00
Swedish energy firm Vattenfall announced the sale on Friday of its German power grid to Belgium's Elia and Australian investment fund IFM for $1.1 billion.

Power network management company Elia will finance the operation through a capital increase and own 60 percent of the grid, with infrastructure specialist IFM holding the rest, Swedish state-owned Vattenfall said in a statement.

The deal "reinforces our position in the perspective of participating in the constitution of a true European energy market," Elia boss Daniel Dobbeni was quoted as saying.

The Vattenfall grid serves 18 million people in northern and eastern Germany and extends for 9,700 kilometres.

Elia is also working on reinforcing off-shore wind energy production aimed at feeding a large grid that will cover central and western Europe.

Vattenfall, the third biggest German electricity provider, also has operations in Sweden, Britain, Denmark, Finland, the Netherlands, Norway and Poland.

The European Commission has pressured major power companies in Germany to

separate energy production and distribution activities to enhance competition

and lower prices.

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