Mexico's Cofece Approves CFE's Purchase of 13 Iberdrola Power Plants

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Researched by Industrial Info Resources (Sugar Land, Texas)--On February 15, the Mexican antitrust watchdog Comisión Federal de Competencia Económica (Cofece) gave conditional approval for the purchase of 13 power plants belonging to the Mexican subsidiary of Iberdrola Group (Bilbao, Spain) by investment fund Mexico Infrastructure Partners FF, S.A.P.I. de C.V. (MIP) in conjunction with the National Infrastructure Fund (Fonadin). There are still a few final steps for final authorization by Cofece, and the acquisition must be concluded within six months.

Among the conditions imposed by Cofece and which must be accepted by both parties is that the plants must operate independently in the market and exchanges of sensitive or strategic information between competitors must be avoided. In order to ensure compliance with these conditions, it is added that Fonadin's participation must be reduced to a maximum of 51% and different control mechanisms are established to ensure that the administration and management of the plants are placed in capable hands.

In April 2023, Mexican President López Obrador announced the operation as a way to regain the state's leading role in the electricity generation market, and this action will require an investment of US$6 billion. These funds will be financed 40% by Fonadin and institutional investors and the remaining 60% through debt issuance. Once the transaction is completed, Iberdrola Mexico will transfer the 13 generation plants, representing 8,436 megawatts (MW) of installed capacity in combined-cycle units and 103 MW in wind generation to MIP. The state-owned Federal Electricity Commission (CFE) (Mexico City) will be responsible for the operation and maintenance of these plants in exchange for a fixed or variable consideration based on the energy generated. Iberdrola announced that it will reinvest its proceeds from the operation in expanding its renewable generation capacity in the country.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Plant Database can click here for the profiles of the affected plants.

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