ROME, March 8 (Reuters) - Canada Pension Plan

Investments (CPP) will acquire a 17.5% stake in the fixed-line

network of Telecom Italia (TIM) for up to 2 billion

euros ($2.19 billion), the group said on Friday.

The investment values the business at an enterprise value of

about 18.8 billion euros ($20.55 billion) and will be made

through the Optics Bid Co group, which also includes U.S. fund

KKR, the Abu Dhabi sovereign wealth fund ADIA, Italy's

infrastructure fund F2i and Italy's Economy Ministry.

The sale of the TIM network was approved by the former phone

monopoly's board in December and cleared by Italy's government

in January and establishes a wholesale-only player which will

provide broadband capacity to TIM and other telecoms operators.

"Our investment will help deliver high-quality digital

infrastructure across Italy as well as generating long-term

risk-adjusted returns for the fund," James Bryce, Managing

Director, Global Head of Infrastructure, of CPP Investments,

said in the statement.

He added that the deal "can represent the first of several

infrastructure investments in Italy for CPP Investments".

The investors will support the completion of an extensive

upgrade to the existing network, to deliver high quality and

high capacity fiber-based services in urban and rural areas, the

statement said.

($1 = 0.9150 euros)