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López Obrador, after the purchase from Iberdrola of 13 electricity generation plants: "It is a new nationalization"


The Mexican president announces that the state electricity company, CFE, will operate the plants, making it the largest generator of electricity in Mexico

Mexico has announced this Tuesday an agreement with the main Spanish electricity company, Iberdrola, to acquire 13 electricity generation plants in the country, which will be operated by the Federal Electricity Commission (CFE), as explained in a video by the Mexican president, Andrés Manuel Lopez Obrador.

The acquisition will cost the Government about 6,000 million dollars.


The keys to the business between Mexico and Iberdrola: a larger market in exchange for old technology

"Today the Government of Mexico signed an agreement to purchase 13 electricity generation plants from Iberdrola that will form part of the public patrimony and will be operated by the CFE," the president said on Twitter.

"This is a new nationalization of the electrical industry."

With this acquisition, CFE will go from generating 39.6% to generating 55.5% of all the energy in the country, making it the leading company in its sector.

López Obrador met with Ignacio Sánchez Galán, president of Iberdrola;

Enrique Alva, manager of the company in Mexico and David Mesonero, general director of Development, as well as with the secretary of the Treasury, Rogelio Ramírez de la O, and the general director of CFE, Manuel Bartlett.

In a video, López Obrador said that despite the "discrepancies" he had with Iberdrola, a "historic" agreement was reached.

The National Infrastructure Fund (Fonadin) will be in charge of providing the capital for this transaction, reported Ramírez de la O. "The operation can reach around 6,000 million dollars, subject to the refinements that we can make in the coming weeks." said the Secretary of the Treasury.

López Obrador with Rogelio Ramírez de la O, head of the Treasury;

Manuel Bartlett, director of CFE, Enrique Alva, manager of Iberdrola in Mexico and Ignacio Sánchez Galán, president of the company. Presidency of Mexico

The news came hours after Iberdrola issued a statement in which it reported that it will sell assets valued at around $6 billion to a Mexican financial vehicle management company, Mexico Infrastructure Partners, to divest itself of 80% of its generation business in the Latin American country.

"With this transaction, the company continues to be the main private generator of renewable energy in Mexico and promotes compliance with its decarbonization commitments," the statement said.

Iberdrola has been the target of attacks by President López Obrador since he took power at the end of 2018 and, in the video that the president shared on his networks, he referred to these tensions.

"We are very grateful to Iberdrola, its CEO, its global president, for the willingness to reach an agreement," said the president.

“We have had some discrepancies, but dialogue can do everything, dialogue and goodwill.

From those differences, from those discrepancies, something extraordinary arises.

I repeat, historic."

A year ago, López Obrador accused Repsol, OHL and Iberdrola itself of abusing Mexico and its peoples.

To strengthen state companies and guarantee CFE a market monopoly, the president proposed modifications to the Electricity Industry Law and accused Iberdrola of lobbying to pressure against its approval.

In addition, he has expressed irritation that his political rival, former President Felipe Calderón, served on the company's board in 2016.

“Two years ago we were here, he asked us to negotiate, to talk, to reach agreements.

Two years later, we have dialogued, we have spoken and we have reached agreements”, said Sánchez Galán after the meeting with the Mexican president.

"We have understood what your government's energy policy is and that policy has led us to seek a situation that is good for the people of Mexico and that at the same time meets the interests of our shareholders," added the Iberdrola chairman.

López Obrador hopes that by the end of his six-year term, which ends in September of next year, CFE will be generating around 65% of all electrical energy in the country.

This, the president assured, "means the definitive rescue of a fundamental public company such as the Federal Electricity Commission."

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Source: elparis

All news articles on 2023-04-07

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