Portugal's EDP says Abu Dhabi can raise stake

LISBON, April 10 (Reuters) - Abu Dhabi government-owned energy investment company IPIC can raise its stake in Energias de Portugal (EDP) (EDP.LS: Quote, Profile, Research) to 5 percent under an agreement with the Iberian utility, EDP's chief executive said on Thursday.

IPIC said on Wednesday it had acquired a 2 percent stake in Portugal's leading utility in order to pursue investment opportunities jointly in the power and water sector.

EDP Chief Executive Antonio Mexia told reporters that IPIC "entered with 2 percent (of EDP) but it has the possibility to raise the stake to five percent."

"The decision is theirs, it is in the agreement," Mexia said, referring when IPIC could raise its stake.

Analysts said the entry of IPIC as a shareholder in EDP could represent an important potential partner in the planned initial public offering of IDP's renewable energy unit. (Reporting by Sergio Goncalves; writing by Axel Bugge)