Iberdrola is selling the bulk of its Mexican power-generating assets to a state-owned fund for $6 bn, using the proceeds to accelerate its investments in the US and Europe. An agreement has been reached between Iberdrola Mexico and Mexico Infrastructure Partners, which have signed a memorandum of understanding whereby MIP will acquire 8539 MW of installed capacity from Iberdrola. Of the total, 8436MW corresponds to combined cycle gas plants and 103 MW to wind power assets.

The Spanish group’s move comes after years of pressure on the company from the left-leaning government of president Andrés Manuel López Obrador, who hailed the purchase as a ‘new nationalisation’. The Mexican leader has taken a particularly hostile stance towards Spanish corporate investment because of the country’s colonial history. The deal also helps satisfy López Obrador’s aim of increasing the proportion of electricity generation in state hands.

José Sainz Armada, Iberdrola’s chief financial officer, said the company would channel the proceeds of the sale into new investments in what he called ‘A-rated geographies’. Iberdrola expects to take advantage of the large green investment incentives in the USA’s Inflation Reduction Act. He commented: “The US is probably the country that brings more opportunities for the medium and long term.” But the company has also become more positive on the EU in recent months as the continent’s own green investment plans advance, including the REPowerEU programme to overhaul the energy sector. Iberdrola’s shares rose 2.5 % to close at €11.71 in Spain following the announcement.

The deal will increase the share of Mexico’s state-owned power company CFE to 55.5 % of the market, from slightly less than 40 per cent now. A fund run by private asset manager Mexico Infrastructure Partners, but financed by the government will take control of 12 combined cycle generation plants and one onshore wind farm, subject to final details and approvals, Iberdrola said.

Of the plants included in the agreement, 87% of the total installed capacity to be divested is currently operated by independent energy producers contracted with the Federal Electricity Commission (CFE).

These plants include the combined cycles of Monterrey I and II, Altamira III and IV, Altamira V, Escobedo, La Laguna, Tamazunchale I, Baja California, Topolobampo II and Topolobampo III, as well as the wind asset La Venta III.

The privately operated combined cycle gas plants of Monterrey III and IV, Tamazunchale II and Enertek are also included in the agreement.