This was announced by the company and Mexican President Andrés Manuel López Obrador on Tuesday (local time). Iberdrola is thus selling around 80 percent of its current business in the Latin American country.
The agreement was reached after years of disagreements between the two sides over the energy policy of the left-wing nationalist president. López Obrador, who has led the second largest economy in Latin America since 2018, is banking on a stronger state role in the energy sector to the detriment of private providers.
The letter of intent stipulates that Iberdrola will sell gas and steam turbine power plants and a wind power plant with a total output of a good 8,500 megawatts. However, the Spanish electricity provider will remain the leading private provider of renewable energy in Mexico and will continue to meet its commitments to decarbonization, the company said.
López Obrador likened the transaction to one nationalization the electricity industry. The state provider CFE will increase its share of the total electricity generation in the country from 39.6 percent today to 55.5 percent.
In Madrid, the Iberdrola share temporarily rose by 2.06 percent to 11.4250 euros.
/aso/DP/stk
MEXICO CITY (dpa-AFX)
Leverage must be between 2 and 20
No data
More news about Iberdrola SA
Image Credits: Cristina Arias/Getty Images, AIF