Iberdrola closes USD-6.2bn sale of power assets to Mexican state

Spanish utility Iberdrola SA (BME:IBE) announced on Tuesday that it has finalised the sale of its 12 combined-cycle gas plants and a wind farm in Mexico to the Mexican state in a transaction valued at around USD 6.2 billion (EUR 5.71bn).

Closed under the terms ironed out with the Mexican government in June 2023, the deal encompasses the transfer of a total of 8,539 MW of power generation capacity, associated contracts and 460 employees working at the plants to a trust managed by Mexico Infrastructure Partners (MIP). The sale accounts for 55% of Iberdrola's EBITDA in Mexico, the utility said.

Additionally, Iberdrola signed power purchase agreement with the MIP-led trust and a contract for the provision of transitional services for the temporary management of the assets included in the sale.

Going forward, the 13 power plants will be operated by Mexican state-owned utility CFE.

The transaction originated from a memorandum of understanding between Iberdrola Mexico and MIP in April last year, and represented a “new nationalisation” of Mexico’s electricity industry, as president Andres Manuel Lopez Obrador described it at the time.

For the Spanish company, the deal opened the door to creating the “New Iberdrola Mexico”, oriented towards decarbonisation and wind and solar development.

The divestment leaves Iberdrola with 15 plants, all activity with private customers, and a portfolio of renewable projects in the country. The company says it has over 6,000 MW of projects in the renewables portfolio, of which more than 2,000 MW could be developed in the next five years.

(USD 1.0 = EUR 0.922)

Choose your newsletter by Renewables Now. Join for free!