Mexico Recognized for Iberdrola Plant Acquisition

The Mexican government, through the Ministry of Finance, has been awarded the M&A Loan Deal of the Year at the Global Banking & Markets: Latin America Awards 2024. This accolade was granted in recognition of the US$6.2 billion transaction for the acquisition of 13 power plants from Iberdrola.

The award highlights the participation of key financial institutions, including BBVA, Bancomext, Banobras, Nafin, Santander, and SMBC. The Global Banking & Markets Awards are among the most prestigious in the financial sector for Latin America and the Caribbean, celebrating innovation and excellence in capital, credit, and sustainable financing markets.

The selection process for these awards considers criteria such as transaction size, structure, term, distribution, and access to new financing sources. Transactions demonstrating high-quality execution, market innovation, or opening new markets gain additional recognition. "These awards represent an opportunity to identify exemplary transactions that promote economic growth, stability, and innovation in Latin America. The award ceremony will be held on Dec. 10 in Miami," the Ministry of Finance announced.

Earlier this year, Iberdrola sold 55% of its business in Mexico, retaining an installed capacity of 1,232MW in renewable energy, 1,166MW in combined cycles, and 202MW in cogeneration. The deal, approved by the Federal Economic Competition Commission (COFECE), included 12 combined cycle generation plants and a wind farm in Mexico. As a result, Iberdrola’s thermal production, including combined cycles and cogeneration, decreased by 56% year-on-year, totaling 11,246 GWh in the first half of the year.

The relationship between Iberdrola and the Mexican government, previously strained during former President Andrés Manuel López Obrador's administration due to allegations of illegal energy sales and a US$500 million fine, improved with this transaction. The sale of power plants and a wind farm to the Mexican government for US$6.2 billion has allowed Iberdrola to focus on renewable energy projects in Mexico. These facilities will now be operated by CFE.

Looking forward, Iberdrola announced plans to invest US$1 billion in renewable energy projects during the first two years of President Claudia Sheinbaum's administration. This investment aims to develop 1,000MW of renewable energy, primarily through wind and solar photovoltaic technology, distributed across the country. Katya Somohano, CEO, Iberdrola Mexico, mentioned that the total investment would depend on additional requirements and reinforcements necessary for interconnecting the projects to the national electrical transmission network.