UPDATE 2-Terna dividend rise beats expectations

* Terna div policy step-up exceeds market expectations

* CEO sees 50 mln euros of extraordinary div in 2009

* Shares up 1 pct, outperform sector

(Releads, adds conference call comments, share price)

By Stephen Jewkes

MILAN, Nov 10 (Reuters) - Italian power grid operator Terna (TRN.MI) surprised the market with a promise of higher dividend payouts after the profitable sale of its Brazilian assets.

On Nov. 3, Terna, Europe's biggest independent power grid operator in terms of assets, finalised the sale of a 66 percent stake in Brazil's Terna Participacoes S.A., which is set to boost the group's full-year net profit by over 400 million euros ($599 million).

Terna increased its interim dividend while at the same time raised the bar on its dividend policy. It also extended the period in which an extraordinary dividend relating to proceeds from the sale of the Brazilian assets will be paid.

"The results are no big surprise, but the dividend news is very positive," said Javier Suarez, analyst at UniCredit. "It's a very clear picture they have given, and the risks for the dividend are about zero. They already have the cash in from the Brazil sale."