Iberdrola has signed a binding agreement to sell a large part of its portfolio in the country to the government for $6 billion.
The Spanish energy company signed an agreement with Mexico Infrastructure Partners (MIP) that will see the fund acquire 55% of Iberdrola’s business which includes more than 8.5GW worth of gas-fired assets and one wind farm.
Iberdrola and MIP first announced the sale earlier this year (PFR, 4/5). MIP is financially backed by the National Infrastructure Fund of Mexico (Fonadin) and other public financial entities associated with the government of Mexico.
The assets included in the sale that are contracted with Mexico’s Comisión Federal de Electricidad (CFE) are:
Monterrey I and II - 449MW
Altamira III and IV - 1,096MW
Altamira V - 1,155MW
Escobedo - 878MW
La Laguna - 537MW
Tamazunchale I - 1,179MW
Baja California - 324MW
Topolobampo II - 917MW
Topolobampo III - 766MW
La Venta III (wind) - 103MW
Also included in the agreement are the private Tamazunchale II (514 MW), Monterrey III and IV (477 MW), Enertek (144 MW) combined cycle power plants.
The deal took the market by surprise when it was announced earlier this year but seemed to garner a positive response from the private sector. “We’re still digesting the news but reception in the market is more favorable than against it,” said Luis Arizaga, partner for Mexico and Latin America at Exus Management Partners, at the time (PFR, 4/24).
Iberdrola will retain 13 power plants in Mexico and a more than 6,000MW renewable pipeline, along with an easier relationship with the government. Iberdrola’s Mexico chief financial officer, Jose Sainz, had declared the company was entering a new phase of their relationship with the Mexican government with this new deal in the works.
Following the signing of the agreement, Mexico's Energy Regulatory Commission (CRE) granted a generation permit to one of Iberdrola’s wind farms, the 105MW Santiago project located in the state of Guanajuato.