Italy has agreed to sell a 35 percent stake in its electricity grid to China's state power company for at least 2.1 billion euros ($2.8 billion) as part of its privatisation drive.

The board of state holding company Cassa Depositi e Prestiti (CDP) on Wednesday gave the green light for the sale to China's State Grid Corp., according to a statement.

The deal is the latest move by China to buy up government-owned infrastructure in Europe from cash-strapped states still struggling to clean up their finances after the debt crisis.

Italy's reformist Prime Minister Matteo Renzi has vowed to cut the towering debt pile of the eurozone's fifth-largest economy by selling off up to 12 billion euros of government assets.

Renzi will oversee the formal signing of the deal on Thursday, according to a government statement.

Chinese investors have already bought stakes in several of Italy's state-controlled energy companies, including energy group Eni and utility Enel.

CDP, which is 80.1 percent owned by Italy's treasury, has also decided to sell another 14 percent share of energy grid unit CDP Reti to Italian institutional investors.

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TERNA RETE ELETTRICA NATIONALE