Iberdrola promises to reinvest US$6bn in Mexico renewables

Spanish renewables company Iberdrola’s subsidiary in Mexico says it will reinvest every “peso and dollar” from the US$6bn sale of 13 power plants to the government.

“Each and every one of the pesos and dollars received from this operation, Iberdrola is committed to reinvesting in Mexico in renewable energy,” Katya Somohano, the firm’s planning and sustainable director in Mexico, reportedly said during an event hosted Thursday by Mexican energy association AME.

According to news site Energía a Debate, Somohano told reporters on the sidelines of the event that the company already has a portfolio of prospects but final decisions “will depend a lot on where there is a need for investment and where permits are granted.” 

In recent months, Iberdrola Mexico CEO Enrique Alba has held several meetings with governors of states with high potential for renewable energy amidst the boom in nearshoring. 

Alba met with Guanajuato state governor Diego Sinhue on October 11 and Durango governor Esteban Villegas on September 27, according to social media posts. 

The 13 plants Iberdrola sold to the Mexican government represent about 77.6% of the company's assets in the country, which will be transferred through a trust fund with public and private participation.

According to the Spanish firm, 8.54GW of capacity will change hands through the transaction, made up of 12 combined cycle plants and one 103MW wind farm, La Venta III in Oaxaca state.

The purchase includes 5GW of assets older than 16 years with 87% using the legacy independent producer (PIE) contract model. This means they will require permit renovations which could have led to operational hurdles had the permits been withheld, as has been the case for many private operators in Mexico.

Most of the plants are in Mexico's northern states, including Tamaulipas, Nuevo León, Durango, Sinaloa and Baja California.