(Reuters) -U.S. investment management company Global Infrastructure Partners and Canada's pension fund CPP Investments are nearing a deal to buy clean energy company Allete, and a deal could be announced soon, a source familiar with the matter told Reuters.

Reuters had reported in December that Allete, a power utility and energy developer headquartered in Duluth, Minnesota, was exploring a sale of the company.

GIP and CPP declined to comment on the FT report, while Allete did not immediately respond to a Reuters request for comment.

The Financial Times, which had earlier reported the deal, said it was for around $5 billion.

Allete, which operates wind, solar, coal-fired, biomass and hydroelectric power generation assets across the Upper Midwest, plans to invest around $3.3 billion in clean energy initiatives and transmission projects by 2027.

(Reporting by Anirban Sen in New York and Chandni Shah in Bengaluru; Editing by Rashmi Aich)