Canadian pension funds target ScottishPower stake TWO Canadian pension funds are poised to team up to buy a stake in ScottishPower's electricity grid business. Parent Iberdrola is selling the holding to raise funds for further investment in Britain's infrastructure. Iberdrola is discussing the sale of a minority stake in the business, which could fetch more than £1 billion, with pension schemes and sovereign wealth funds expected to be the likely bidders. The group is thought to have received initial interest from eight parties, which have now been reduced to three serious bidders for a 30 per cent stake in the business, including the Abu Dhabi Investment Authority (Adia). Adia faces competition from Ontario Teachers Pension Plan - which owns National Lottery operator Camelot and tried to buy East Kilbride-based goals Soccer Centres this summer - and Borealis Infrastructure, a division of another Ontario-based pension group, Omers. A source with knowledge of the deal said Borealis and Ontario Teachers may join forces to produce a joint bid. Iberdrola operates ScottishPower as two businesses, the generation division and the transmission and distribution arm, or grid, in which it is selling a stake. The grid is valued at about £4.5bn. Ignacio Galan, Iberdrola's chairman and chief executive, met Chancellor George Osborne last month to confirm the company's commitment to investing £8bn in its energy transmission infrastructure. Madrid-based Iberdrola is also said to be preparing to sell a "non-core" portfolio of wind farms in Poland, as the country moves to update its renewable energy regulations in favour of offshore wind. It is also one of a host of Spanish firms that have recently raised hundreds of millions on the corporate bond market, taking advantage of a fall in interest rates after the European Central Bank pledged to reduce the country's financing costs last month. Iberdrola sold €750 million (£610m) in an oversubscribed five-year bond.