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The Kuwait Investment Authority (KIA), the world’s sixth largest sovereign wealth fund, has made a rare foray into an overseas energy investment. It has agreed to take a 25% stake in Spanish energy group Gas Natural’s international power subsidiary.
The deal is one of strategic overseas investments by Gulf sovereign wealth funds and state-owned entities, that have accumulated cash piles on the back of $100/B plus prices in the past four years, and are taking advantage of relatively low oil prices and cheaper asset values to snap up bargains.
The deal with Gas Natural for a stake in the Spanish utility’s Global Power Generation (GPG) subsidiary is no bargain though. KIA has reportedly agreed to subscribe to a $500mn capital hike at GPG and take a 25% stake in the unit, which the parent company says was created in October last year as part of its plans to grow overseas. (CONTINUED - 667 WORDS)