Iberdrola Closes the Sale of 55% of its Business in Mexico for $6.2B

Source: www.gulfoilandgas.com 2/26/2024, Location: South America

Iberdrola has closed the sale of 55% of its business in Mexico for around $6.2 billion dollars (about €5.8 billion). The transaction includes the sale of 13 generation plants with an installed capacity of 8,539 MW.

Around 99% of the plants are gas-fired combined cycle power stations, with 87% operating under the Independent Power Producer regime, contracted with the CFE.

Specifically, the plants included that operate contracted to the CFE under the regime of Independent Power Producers are:

- Monterrey I and II: 449 MW

- Altamira III and IV: 1,096 MW

- Altamira V: 1,155 MW

- Escobedo: 878 MW

- La Laguna: 537 MW

- Tamazunchale I: 1,179 MW

- Baja California: 324MW

- Topolobampo II: 917 MW

- Topolobampo III: 766 MW

- La Venta III wind farm: 103 MW

Additionally, the sale also includes the private combined cycle gas plants of Monterrey III and IV (477 MW), Tamazunchale II (514 MW) and Enertek (144 MW).

The 460 employees working at these facilities will become part of the trust led and managed by MIP (Mexico Infrastructure Partners).

In total, the divestment is equivalent to 55% of Iberdrola’s gross operating profit (EBITDA) in the country, including the associated contracts and the 460 jobs linked to the operation.

Iberdrola will retain 15 plants, all of its private customers and its portfolio of renewable energy projects and pipeline to continue increasing its wind and solar assets in the country in the coming years.

The divestment has been closed in accordance with the terms agreed last June and is in keeping with Iberdrola’s strategy to continue delivering on its ambitious decarbonisation commitments.

The operation had the financial support of the National Infrastructure Fund of Mexico (Fonadin), other public financial entities linked to the Government of Mexico and private finance groups.

As part of the agreement, Iberdrola has signed power purchase agreements with the trust, led and managed by MIP, as well as a contract for the provision of transitional services for the temporary management of the assets sold.

COMMITMENT TO THE COUNTRY'S DECARBONIZATION

Iberdrola has a portfolio of more than 6,000 MW of renewable projects in the country, of which more than 2,000 MW could be developed in the next five years. The company aims to continue growing by providing clean energy for its private customers and contributing to Mexico's renewable development.

In April 2023, the Executive Chairman of Iberdrola, Ignacio Galán, and the President of the Government of Mexico, Andrés Manuel López Obrador, announced the initial memorandum of understanding between Iberdrola Mexico and MIP, which has now been closed. Both leaders pledged to advance the development of renewable energy in the country, which Iberdrola has already started to deliver on. The company’s new 105 MW Santiago wind farm was completed in September 2023.

Through its new investments in Mexico, Iberdrola will reaffirm its leadership in the development of renewable energy, contributing to the country's energy transition process.


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