A Chinese sovereign wealth fund has acquired an 8.7 percent stake in the company that controls the British utility, Thames Water.

The purchase represents the first such investment in Britain by the China Investment Corp. (CIC), following a recent visit to China by the UK Chancellor of the Exchequer, George Osborne.

CIC did not disclose the purchase price.

The CIC acquisition follows a 9.9 percent purchase in Thames Water by another massive sovereign fund, the Abu Dhabi Investment Authority, last month.

Thames Water --Britain’s biggest water and sewerage company -- is majority-owned by Kemble Water, a group of investors led by the Australian bank Macquarie.

Osborne praised the transaction.

"This is a significant step by China. It is a vote of confidence in Britain as a place to invest and do business,” he told reporters.

"This investment is good news for both the British and Chinese economies."

Former UK Trade Minister Lord Digby Jones told BBC: "It is good news because in Britain, and the water companies know this, needs constant repairs, so more funds in to help that when it's not a drain on the public purse has to be right."

CIC chairman Lou Jiwei has made statements expressing his desire to buy stakes in European and U.S infrastructure entities.

CIC was formed five years ago as a vehicle for China to invest its estimated $3.2-trillion treasure chest of foreign reserves.

During Osborne’s Chinese sojourn he met with the bosses of CIC and the ICBC Bank, as well as China's Vice-Premier Wang Qishan.

Reportedly, he discussed a number of other potential investments in Britain for China’s deep-pocketed investors.

Last summer, a Hong Kong-based investment firm headed by billionaire Li Ka-shing agreed to take over Britain’s Northumbrian Water utility for £2.4 billion

Osborne also said that his government will cooperate with Hong Kong to help develop the City of London financial as a major center of trade of the Chinese currency, the Yuan.