Mexico to buy 13 power plants from Spain's Iberdrola for $6 billion

April 04, 2023 11:15 PM CEST | By Reuters
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MADRID/MEXICO CITY (Reuters) - Mexico's government has agreed to buy 13 power generation plants from Spain's Iberdrola in a deal worth $6 billion, which Mexican President Andres Manuel Lopez Obrador on Tuesday called a "new nationalization" of the energy sector.

Lopez Obrador has frequently lambasted Iberdrola, openly criticizing the leading Spanish power utility of benefiting from past Mexican governments and accusing it of trying to mount a media campaign against his government in collaboration with his conservative adversaries.

Iberdrola was fined by the Energy Regulatory Commission in 2022 for regulatory breaches.

In a video posted on Twitter, Lopez Obrador, flanked by government officials and Iberdrola executives, thanked the firm for its "willingness" to agree to terms of the sale.

He said the government would acquire the plants through the finance ministry and national power utility Comision Federal de Electricidad (CFE).

Iberdrola said in a statement it had inked a memorandum of understanding with asset manager Mexico Infrastructure Partners (MIP) to sell its 8,436 megawatts of combined cycle gas capacity, plus the wind asset La Venta III with 103 MW of installed capacity.

Mexican Finance Minister Rogelio Ramirez de la O said that the National Infrastructure Fund of Mexico (Fonadin), would likely hold the majority of the capital in the transaction and would be the special vehicle used to refinance the operation.

Despite the sale, Iberdrola said in a statement to the Spanish stock market regulator that it will carry out new investments in Mexico to reaffirm its "leadership in the development of renewable energy in the country."

The agreed value may be modified based on the closing date of the transaction and other adjustments, Iberdrola said.

The operation has the financial support of Fonadin and other public financial entities associated with the government of Mexico.

(Reporting by Belen Carreno in Madrid and Adriana Barrera in Mexico City; Additional reporting by Raul Fernandez Cortes and Dave Graham; Writing by Andrei Khalip and Anthony Esposito; Editing by Mark Porter and Deepa Babington)

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