UPDATE 1-Italy approves sale of energy grid stake to China
* CDP to sell 35 pct in CDP Reti to China grid
* CDP wants to shed further 14 pct of CDP Reti
* Sale part of Italy's push to sell state assets (Adds details and background of planned sale)
By Steve Scherer
ROME, July 30 (Reuters) - Italy's Cassa Depositi e Prestiti (CDP) said on Wednesday its board had approved the sale of a 35 percent stake in its energy grid holding company to China's State Grid Corp for no less than 2.1 billion euros ($2.8 billion).
State holding company CDP owns all of energy grid unit CDP Reti, which has a 30 percent stake in gas transport group Snam and will soon receive a similar stake in power grid Terna.
On Thursday, Italian Prime Minister Matteo Renzi will host the signing of the sale agreement between CDP and China's State Grid International Development Ltd (SGID), a wholly-owned subsidiary of China's state grid, according to a statement.
The planned sale is part of Italy's efforts to shed state assets to reduce the country's 2-trillion-euro public debt and raise funds to invest in infrastructure projects. It is also one of the biggest Chinese investments in Italy.
Italy's Treasury, which owns 80 percent of CDP, has pledged to raise the equivalent of 0.7 percent of GDP, or about 11 billion euros, from disposals this year of stakes in companies including air traffic control operator ENAV, and oil companies Eni and Enel.
The state lender's initial plan envisaged the sale of up to 49 percent of CDP Reti to raise some 3 billion euros. The CDP board said it agreed to seek Italian institutional investors to buy another 14 percent of CDP Reti.
Italy has been urging China to invest more in Italy for a number years and Renzi visited the country last month to encourage investment.
Power and gas networks have become an attractive asset class in recent years as their return is regulated by governments, giving investors a predictable source of income even when the economy is struggling.
As part of the deal, CDP Reti will receive a loan of 1.5 billion euros prior to the sale, 45 percent from CDP and 55 percent from a pool of banks, the statement said.
When the sale is finalised in the coming months, SGID will be able to nominate two of CDP Reti's five board members and designate one board member for both Snam and Terna, according to the statement.
($1 = 0.7477 Euros) (Reporting by Steve Scherer; editing by David Clarke)
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