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China wealth fund buys stake in Thames Water

The investment is "good news" for British and Chinese economies, according to George Osborne.

China's sovereign wealth fund has bought a 8.68 per cent stake in Thames Water, London's water company, marking the first acquisition of the China Investment Corporation (CIC) in Britain.

A one-sentence statement on the CIC website said the £265 billion fund bought the stake through a wholly-owned subsidiary of Thames Water, but did not give the amount paid.

The deal follows a visit to China this week by Chancellor George Osborne, who has been looking at ways to boost the economy through foreign investment in British infrastructure.

"This is a significant step by China. It is a vote of confidence in Britain as a place to invest and do business", Osborne said."This investment is good news for both the British and Chinese economies."

In November, CIC chairman Lou Jiwei announced plans to invest in US and European infrastructure, especially Britain.

The deal follows a £2.4 billion acquisistion of British utility Northumbrian Water last year by Hong Kong tycoon Li Ka-shing.

It is the second acquisition of a stake in Thames Water by a foreign investor, the first being a 9.9 per cent stake by the Abu Dhabi Investment Authority, another large sovereign wealth fund.

Thames Water is owned by Kemble Water Holdings- who acquired the company from German utility RWE in 2006 for £8bn- and provides water to London and some surrounding areas.