Iberdrola to speed up US green growth plans after $6bn Mexico sale under 'new nationalisation'
Spanish giant says massive gas power generation disposal bolsters ability to seek opportunities under Biden's IRA and in Europe
Global green power giant Iberdrola said it expects to speed up investment plans under the US Inflation Reduction Act (IRA) after a $6bn sale of power assets to Mexico that the nation’s president called “a new nationalisation”.
The Spain-based group agreed to sell 8.5GW of generation plant – mostly gas but including a 103MW wind farm – to Mexico’s state power utility CFE under a deal due to complete later this year.
Mexican President Andres Manuel Lopez Obrador (AMLO), who met Iberdrola chairman Ignacio Galan yesterday (Tuesday), called the deal “a new nationalisation” that gives CFE a majority position in Mexico’s power system.
But Galan said after meeting the president: "Iberdrola is grateful for the support and flexibility shown by the Mexican government in reaching this agreement and considers Mexico a strategic country with potential for growth and expansion, where it will show its support for Mexico and the state by developing renewable capacity."
After the deal is completed, Iberdrola will be left with an operating base of around 1GW each in renewables and gas generation, and a 6GW renewables pipeline that the Spanish company said it will be able to advance with greater certainty following the sale.
Iberdrola said it remains committed to being Mexico’s “leading private generator of renewable energy” under the improved relationship.
But Iberdrola made clear when talking to financial analysts that the deal gives it more financial firepower that could help its plan for “recycling capital towards increasing exposure rising growth in new opportunities in the US (IRA) and Europe”.
The US IRA, which offers big incentives for green investments, is acting as a magnet for major foreign players, with Iberdrola already a major player in American renewables through its majority-owned Avangrid business.
Finance chief Jose Sainz said: “This deal gives us opportunities to accelerate growth in the US given the IRA. Probably at some point we will review our renewable plans in the US.
“In Europe this deal improves our financial strength so we will be look to new opportunities also.”
Iberdrola shares were trading almost 2% higher in Madrid by mid-morning following the announcment of the deal.
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