The $410 billion sovereign wealth fund of China said that it purchased a minority stake in Thames Water, a water network, which serves London, marking th
e first acquisition of the fund in Britain. CIC (China Investment Corporation) claimed on Friday that it purchased the 8.68% stake in Thames Water via its completely owned subsidiary. The deal follows gossips this week with Chancellor George Osborne in China, who seeks to boost investment in British infrastructure as way to lift the economy of Britain. Mr. Osborne stated that this speculation is a good news for Chinese as well British economies. Mr. Lou Jiwei, Chairman at China Investment Corporation said that china is delighted for investing in ailing infrastructure of Western nations, particularly Britain.
The increase in inflation in 2011 from which water utilities of Britain are protected via regulated returns has increased the appeal of such firms to infrastructure investors looking for predictable safety and long term cash flows. Thames Water was purchased by Kemble that supplies sewerage and water services to London a well as quite a few surrounding regions for 8 billion pounds, from German utility RWE in the year 2006.
