Mexico Energy Monitor

April 5, 2023

Iberdola opts to exit Mexico

• Spanish energy giant Iberdrola is selling off the bulk of its assets in Mexico, winding down decades of operations in Mexico and stepping away from clashes with Mexican President Andrés Manuel López Obrador (AMLO).

• The group filed Tuesday a statement to the National Securities Market Commission (CNMV) that subsidiaries Iberdrola Generación México and Iberdrola Renovables México have signed an agreement of intent with energy and infra investment fund manager Mexico Infrastructure Partners (MIP). 

• AMLO confirmed the deal in a video April 4, noting that while the deal went through MIP, the government was purchasing the assets through national infrastructure fund Fonadin, and MIP was acting as an asset manager in the transaction. The video featured the president meeting with Manuel Bartlett, CEO of state power company CFE, finance minister Rogelio de la O and Iberdrola CEO José Ignacio Sánchez Galán as well as representatives of the Mexican subsidiaries. 

• In the clip, AMLO describes the deal as part of a “new nationalization” of Iberdrola’s assets in Mexico. 

• These include several combined-cycle gas power plants: Monterrey I and II, Altamira III and IV, Altamira V, Escobedo, La Laguna, Tamazunchale I, Baja California and Topolobampo II and III, as well as the 103MW La Venta onshore wind farm III.  

• A press release from Iberdrola further indicated it planned to also sell the Monterrey III and IV, Tamazunchale II and Enertek power plants on the wholesale market. 

• Starting operations in Mexico in 1984, Iberdrola’s Mexican operations had been steadily growing before AMLO took office in late 2018. After which, the president began to regularly assail the firm for abusive practices and alleged improper deals with past governments.  

• The announcement on Tuesday, however, was amicable in tone with the government saying it “appreciates the flexibility and willingness of the Iberdrola company and recognizes the importance of dialogue to reach agreements for the benefit of the country and the people.” 

• Sánchez Galán, likewise, expressed his intention to continue collaborating with the Government of Mexico, “always respecting its energy policy,” read the statement.