Iberdrola sells part of its business in the country to the Mexican government for 5,478 million

Galán and López Obrador agree on a leading role for energy in the country’s energy transition with its promotion of renewables

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Iberdrola, through its subsidiaries in Mexico, has signed an agreement of intent with the state company México Infrastructure Partners (MIP) through which it undertakes to sell 8,539 megawatts (MW) of installed capacity, which includes 8,436 MW in combined cycle gas and 103 MW of wind power, for an amount of about 6,000 million dollars (about 5,478 million euros), an amount that could be modified depending on the closing date of the transaction and other possible usual adjustments in this type of agreement, reported the company.

The Chairman of Iberdrola, Ignacio Galán, and the President of the Government of Mexico, Andrés Manuel López Obrador, met this Wednesday and announced the start of this new stage, in which the company continues to be the main private generator of renewable energy in Mexico, with the support of the Federal Government to continue operating its assets under market conditions and promote the energy transition in the country.

Specifically, the divestment operation includes the combined gas cycles, which operate under the regime of Independent Energy Producers contracted with the Federal Electricity Commission (CFE) in Monterrey I and II, Altamira III and IV, Altamira V, Escobedo, La Laguna , Tamazunchale I, Baja California, Topolobampo II and Topolobampo III, together with the La Venta III wind farm, which account for 87% of the total installed capacity to be divested, and the private gas combined cycle plants of Monterrey III and IV, Tamazunchale II and Enertek.

Baker McKenzie have been advisors to Iberdrola throughout the operation, led by his partner Antonio Morales (Madrid), José Morán (Chicago), Reynaldo Vizcarra-Mendez (Mexico), Lorenzo Ruiz de Veslasco (Mexico), Juanjo Corral (Madrid) and Lewis Popoff (Chicago), informed Europa Press in market sources.

The transaction is subject to the agreement and the signing of the definitive contracts by the parties, as well as the obtaining of the necessary regulatory approvals and the fulfillment of certain usual conditions in this type of operation.

The operation has the financial support of the National Infrastructure Fund of Mexico (Fonadin) and other public financial entities linked to the Government of Mexico.

Iberdrola México indicated that it will continue to provide service to its current customers in Mexico, for which it is expected to enter into energy purchase and sale contracts with the companies that are being transferred in order to provide the companies of the Iberdrola Group with the energy and power necessary to develop the renewable generation in Mexico and meet its current and future objectives in the country.

Likewise, the energy group stressed that, through the new investments that it will carry out in Mexico, it will reaffirm its leadership in the development of renewable energies in the country.

The Chairman of Iberdrola, Ignacio Sánchez Galán, thanked “the support and flexibility shown by the Government of Mexico to reach this agreement”, while considering Mexico “a strategic country with potential for growth and expansion where it will show its support for Mexico and the State developing renewable capacity”.

Meanwhile, López Obrador considered that the agreement reached with Iberdrola, which allows progress in the implementation of Mexico’s new energy policy, “represents the beginning of a new stage in which the company will actively participate in the country’s renewable development.”

ATTACKS IN THE PAST OF AMLO TO THE ENERGY.

With this transaction, Iberdrola moves its position in Mexico, a country in which in recent years it has been pressured by the accusations of the Government of Andrés Manuel López Obrador.

The president of Mexico thus repeatedly accused the energy company of trying to “torpedo” one of his workhorses in his mandate, the electrical reform for the country.

Last November, Iberdrola launched a new strategic plan for 2023-2025 with which it foresees record investments of some 47,000 million euros in the period to achieve a net profit of between 5,200 and 5,400 million euros at the end of the period.

This total number of investments includes 11,000 million euros for the acquisition of the American PNM Resources, an operation that the energy company expects to be unblocked next year.

In addition, the group contemplated a new target of 4,900 million euros in the 2023-2025 period from its asset rotation plan, which will be about 3% of its total assets.