SGN distributes gas to 5.9m homes in Scotland, the south of England and Northern Ireland © Alamy

SSE and Abu Dhabi’s sovereign wealth fund have sold their stakes in Scotia Gas Networks for more than £1.2bn, handing control of the main gas network in Scotland and southern England to Canadian long-term infrastructure investors Ontario Teachers’ Pension Plan and Brookfield.

The move raises OTTP’s stake in SGN to 37.5 per cent from 25 per cent previously, while Brookfield Super-Core Infrastructure Partners fund also takes a 37.5 per cent stake.

The remainder is owned by the Ontario Municipal Employees Retirement System. SSE previously owned 33.3 per cent of the company, which it has sold for £1.2bn, and the Abu Dhabi Investment Authority 16.7 per cent. Terms for the Abu Dhabi sale were not disclosed.

The move completes SSE’s plans announced last summer to divest more than £2bn in assets as it looks to fund new investments in renewable energy, with total proceeds now at £2.7bn. It also illustrates the growing move for UK-based companies to sell domestic gas infrastructure as they shift focus towards renewables.

The deal comes just months after National Grid said it intended to sell a majority stake in its national gas network as it also increases its exposure to electricity markets.

Gregor Alexander, SSE’s finance director, said SGN had become a “purely financial” investment for the company and that the funds from the disposal programme would “help enable us to maximise the delivery of our low-carbon electricity orientated strategy”.

“We see significant growth opportunities in our core networks and renewables businesses in the transition to net zero,” Alexander added.

SGN, which distributes gas to 5.9m homes in Scotland, the south of England and the western region of Northern Ireland, includes Scotland Gas Networks plc and Southern Gas Networks plc, two of eight regulated gas distribution networks on the UK mainland. While UK companies are looking to divest gas-linked infrastructure, others see a future for the networks even under the country’s long-term plans to decarbonise.

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SGN, which has committed to achieving net zero carbon emissions by 2045, is planning to repurpose its networks into what it says will be 100 per cent renewable energy “primarily through the use of hydrogen”.

Alistair Phillips-Davies, SSE’s chief executive, said in May that SGN was likely to play a role in transporting hydrogen in the future, but that SSE was focused on the more immediate projected growth in electricity demand.

SSE said the all-cash sale, which does not require shareholder approval, was expected to complete within the current financial year although it was conditional on certain regulatory approvals.

SSE shares were up 1 per cent in early trading in London.

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