Infrastructure and sovereign funds are the main potential buyers of the grid, owned by Scottish Power, unnamed sources close to the talks said.
The sale of up to 49 per cent of Scottish Power’s electricity network could raise between £1bn and £1.5bn for its Spanish parent.
Iberdrola did not comment on what it described as “market speculation”, sparked by a report in a Spanish financial newspaper yesterday.
Two Canadian pension funds – the Ontario Teachers’ Pension Plan and the Borealis Infrastructure Fund – are both believed to be in talks with the utility giant.
It is understood the talks with potential investors are over a minority stake.
Sources close to the talks, said there are no plans to change the way the distribution and networks division of Scottish Power is managed.