CRE Approves Energy Permits for 15 Iberdrola Plants in Mexico

The Energy Regulatory Commission (CRE) has approved the use of the energy generated by 15 power plants operating under the self-supply and cogeneration modalities. These power plants are all owned by Iberdrola Mexico, and some were sold earlier this year to a private trust with government participation.

In an extraordinary session held on Monday, the governing body of the CRE authorized the modification of the conditions related to the utilization of electric energy generated by the self-supply and cogeneration plants owned by Iberdrola.

These plants are: 

• Iberdrola Energía Monterrey
• Parques Ecológicos de México
• Iberdrola Energía La Laguna
• Iberdrola Energía Tamazunchale
• Iberdrola Energía Monterrey, Central Dulces Nombres II
• PIER Quecholac Felipe Ángeles
• Eólica Dos Arbolitos
• Parque Industrial de Energía Renovable
• PIER IV
• Iberdrola Energía del Golfo
• Iberdrola Energía Altamira
• EnerTek
• Iberdrola Cogeneración Ramos
• Iberdrola Cogeneración Altamira
• Iberdrola Cogeneración Bajío

In June 2023, the Mexican government and the private fund Mexico Infrastructure Partners (MIP) reached an agreement to acquire 13 mainly combined-cycle plants from the Spanish-based company. This transaction, which involved the National Infrastructure Fund (FONADIN) of the federal government, resolved some disputes between the administration of President Andrés Manuel López Obrador and Iberdrola Mexico.

This week, MIP initiated a US$2.42 billion offering through Development Capital Certificates (CKD) on the Mexican Stock Exchange, constituting 40% of the capital required for the purchase of Iberdrola's assets, as previously reported by El Economista in April.

MIP successfully raised US$484 million from this issuance, equivalent to 20% of the total offering. CKDs, available on the Mexican Stock Exchange (BMV), are typically used to fund projects with significant potential for growth. While MIP did not explicitly mention the allocation of these funds for the Iberdrola transaction, it indicated the will to invest in electric power projects.

The Ministry of Finance and Public Credit (SHCP) says that the acquisition of 13 electric generation plants from Iberdrola will not burden the Mexican government with debt. The primary source of financing will be FONADIN, and the funds used for the purchase are expected to be recovered within a 10-year period. Several Mexican banks have expressed their interest in providing financing for this endeavor.

For example, the wind farm in Santiago, Guanajuato, which had been held up by CRE's electricity generation permit, has been released. The Dulces Nombres self-supply plant in Monterrey, Nuevo Leon, had also been a subject of conflict between authorities and Iberdrola. As a result, CRE revoked its generation permit and repeatedly denied the modified permit for the use of electric energy. Additionally, the CRE imposed a fine of MX$9.1 million (US$505,406) on Iberdrola Energía Monterrey for allegedly selling electricity to companies not listed in its self-supply permit. The company received the definitive suspension confirmation against this penalty in October of this year.

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