Infravia snaps up Finnish grid

The French fund manager’s acquisition comes less than a day after Borealis and First State bought the country’s largest power distribution network for €2.55bn.

Paris-based InfraVia has bought an electricity distribution network from local steelmaker Outokumpu located in Lapland, Western Finland.

The fund manager has agreed to pay €63 million cash for the business. The transaction is structured as a sale and leaseback, through which Outokumpu will continue to operate the site.

The deal will see a number of the company’s staff transfer to Röyttä Industrial Grid (RIG), a new electricity distribution business established by InfraVia. RIG will continue to operate on Outokumpu’s current Tornio site.

The acquisition will be funded by InfraVia European fund II, its second European infrastructure vehicle, which reached its fundraising target in August this year when collecting €400 million from investors.

The fund is a successor to its 2008-vintage, €200 million Fund I. The vehicle, now fully deployed, comprises 12 assets.

InfraVia is now seeking to raise up to €600 million, with a final close possible within the next few weeks.

The firm also launched, during the first quarter of 2012, a €100 million to €200 million French infrastructure fund, in partnership with local firms Compagnie Benjamin de Rothschild and NGE. The vehicle will focus on small regional public-private partnership (PPP) projects.

The Outokumpu deal is Finland’s second in the power distribution sector in as many days. Yesterday, a consortium comprising Canadian investor Borealis Infrastructure, Australian asset manager First State and local pensions Keva and LocalTapiola acquired the country’s largest network from utility Fortum for €2.55 billion.

Fortum is now preparing for a possible sale of its Swedish and Norwegian distribution businesses, it said yesterday, with a process still dependent on the evolution of market conditions and national regulation in both countries.