Mexico City — The sale of 13 power plants by Spanish company Iberdrola to the Mexican government depends on the authorization of Mexican regulators, in addition to some pending contractual and operational transition details, according to Barclays Mexico chairman and CEO Raúl Martínez-Ostos.
Speaking during the Bloomberg Línea Summit Mexico 2023, the chairman of the British financial group in Mexic explained that it is a “17-track” authorization that includes from the banking, competition and energy aspects, but added that the resources to cover the transaction valued at $6 billion are already in the hands of the government through the National Infrastructure Fund (Fonadin) with the commitment of banking institutions.
“(We still need) authorizations and details of the contract, transition agreements, rules of the game, it has to go to the CRE (Energy Regulatory Commission) and Cofece (Federal Economic Competition Commission)”, he said.
The Barclays executive said that some retirement fund administrators (Afores) have made statements regarding the feasibility and their interest in participating in the financial vehicle that the government will launch to the market to finance part of the operation.
He added that there have been complaints from the Afores with the regulator, the national retirement savings commission to be able to invest abroad in the absence of large projects.
The government of President Andrés Manuel López Obrador announced in April the purchase of Iberdrola’s plants as part of its strategy to strengthen the state-owned company Comisión Federal de Electricidad (CFE), an operation described by the president as a “new nationalization”.
Questioned about the closing date of the operation, Martínez-Ostos said “the ideal scenario” is to try to close it before the end of 2023.
The sale agreement includes annual interest payments of 3.6% until the transaction closes.
Sources previously told Bloomberg Línea that the transaction would close this year.