BERLIN, June 3 (Reuters) - German state lender KfW

has sold 110 million shares in Deutsche Telekom

for 2.5 billion euros ($2.7 billion), it said on

Monday, as part Berlin's plans to sell holdings in companies to

invest in the country's rail network.

The shares - equivalent to a 2.2% stake in the telecoms

group - were sold at 22.13 euros each. Deutsche Telekom shares

closed at 22.64 euros.

Following the sale, KfW and the government hold around 27.8%

of the telecoms company, Germany's Finance Ministry said late on

Monday, adding that stake would remain stable going forward.

"The federal government will use the net proceeds from the

transaction to strengthen the equity of Deutsche Bahn AG

and to expand the rail infrastructure in Germany in a

forward-looking manner," the ministry said.

Share sales so far this year have reached the highest level

in Europe, the Middle East and Africa since a record year in

2021, according to Dealogic.

In February, KfW sold 50 million shares in logistics firm

DHL for 2.17 billion euros.

The German government plans to raise up to 4 billion euros

by selling company shareholdings this year, finance ministry

documents previously seen by Reuters show.

($1 = 0.9184 euros)