Iberdrola sells generation assets in México; this is what we know

Wednesday 5 April, 2023
2 mins read

The President of the Republic, Andrés Manuel López Obrador, announced today an important agreement with the company iberdrola for the acquisition of 13 electricity generation plants in México.

This agreement, which represents an investment of approximately 6 billion dollars is carried out through a national investment vehicle with the majority participation of the National Infrastructure Fund (Fonadin), managed by México Infrastructure Partners, and with bank financing.

The electricity generation plants that are acquired include 12 combined cycle plants located in various states of the country, such as Baja California, Durango, Nuevo León, San Luis Potosí, Sinaloa and Tamaulipas, and a wind power plant in Oaxaca.

With this acquisition, the Mexican State achieves an additional generation of 8,500 MW, which represents an increase in the percentage of participation in the country’s electricity market, going from a current 39 percent to more than 55 percent.

The average lifespan of these plants is more than 18 years, with the possibility of extending up to 28 years, which means that the average useful life of the generation plants of the Mexican State is increased.

In addition, market presence is recovered in strategic areas of the country, such as the northeast region, where the State increases its participation in power generation from the current 7 percent to 45 percent, and the northwest region, where it goes from 52 percent. to 92 percent.

In the northern region, the participation of the State increases from 20 percent to 32 percent.

This agreement marks the beginning of a new stage in which the private sector, including Iberdrola, is welcomed to invest in the development of renewable energy in México under the tutelage of the State.

Also strengthens the participation of the Nation in the generation of electrical energy with the objective of guaranteeing the supply of energy and price stability for Mexicans, as well as for health, education and security services.

The Federal electricity commission (CFE) will be in charge of operating the 13 plants acquired, which will not commit the CFE financially and, in fact, will allow it to reduce costs.

The Government of México thanked Iberdrola for its flexibility and willingness and recognized the importance of dialogue to reach agreements for the benefit of the country and its people.

The Chairman of Iberdrola, Ignacio Sánchez Galán, expressed his intention to continue collaborating with the Government of México, always respecting its energy policy.

This agreement represents an important collaboration between the private sector and the Government of México in the development of the country’s energy sector, with a focus on the generation of renewable energy and the guarantee of the supply of electrical energy for the Mexican population.

“The operation can reach around six billion dollars, subject to the refinements that we have to make in the coming weeks, but it will not add to México’s public budget debt because the Fonadin is out of the public balance sheet and because It is a vehicle capable of going to the market to refinance this transaction. At the Ministry of Finance we will be monitoring this entire process,” said the Secretary of Finance, Rogelio Ramírez de la O.

AMLO and the consumption of electrical energy

President Andrés Manuel López Obrador stressed that with this purchase the government will solve in the medium term all the consumption of electrical energy that the country in full growth requires.

The President highlighted five points:

The government of the Republic, through the Ministry of Finance and the Federal Electricity Commission, acquires 13 electric power generation plants from the company Iberdrola.

The estimated cost of this operation is around five thousand 943 million dollars.

The Federal Electricity Commission goes from generating 39.6 percent to 55.5 percent of all the country’s energy; that is, it becomes a majority company. It is the majority public company to generate electricity. In the northeast region, its participation will go from 6.7 to 44.8 percent.

At the end of the six-year term, the Mexican State will maintain around 65 percent of all electricity generation, which means the definitive rescue of a fundamental public company, such as the Federal Electricity Commission, to guarantee the permanent supply of electricity. meet the growing demand for energy.

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Source: Francisco Montaño from DEBATE on 2023-04-04 17:49:40

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