Mexico City — Spanish company Iberdrola, the largest private electricity generator in Mexico, has announced the sale of almost 80% of its assets in the country, after multiple clashes with the Mexican government headed by President Andrés Manuel López Obrador (AMLO) that affected its operations.
The agreement will be between the subsidiary Iberdrola Mexico and Mexico Infrastructure Partners (MIP) through a trust to buy generation plants with an installed capacity of 8,539 MW, mainly gas and combined-cycle plants, in addition to a wind farm, the company said in a statement sent to the Spanish National Securities Market Commission (CNMV).
The assets that will be included in the transaction are the gas-fired combined-cycle plants Monterrey I and II, Altamira III and IV, Altamira V, Escobedo, La Laguna, Tamazunchale I, Baja California and Topolobampo II and III, together with the La Venta III wind farm, all of which operate under the independent power producer model contracted with Mexico’s state-owned power utility Comisión Federal de Electricidad.
The sale also includes combined-cycle plats Monterrey III and IV, Tamazunchale II and Enertek.
The company said in a statement that the agreed valuation of the assets is $6 billion, an amount “that could be modified depending on the closing date of the transaction and other possible adjustments usual in this type of agreement”.
Iberdrola Mexico has an installed capacity of more than 11,000 MW via 17 combined cycle and cogeneration plants, 693 MW from seven wind farms, and 470 MW from three photovoltaic farms.
The plants are located in 15 states in the country.
Iberdrola said the transaction has the financial backing of Mexico’s National Infrastructure Fund (FONADIN) and other public financial entities linked to the Mexican government.
“Iberdrola Mexico will continue to provide service to its current customers in Mexico (as well as, temporarily, to the companies included in the perimeter of the transaction), for which it plans to enter into power-purchase agreements with the companies being transferred,” it added in the document.
The Mexican government and the CFE have accused Iberdrola of participating in an illegal energy market through the figure of self-supply companies, in addition to selling surplus energy from the PIEs despite the fact that CFE was buying, in theory, all the energy under contract.