Mexico announced Tuesday a deal to purchase 13 electricity generation plants from Spain’s Iberdrola for approximately $6 billion, marking the country’s latest effort to strengthen its position in the energy sector.
The plants “will become part of the public patrimony and will be operated by (state-owned electricity provider) CFE,” President Andres Manuel Lopez Obrador said in a tweet, calling the agreement a “new nationalization.”
According to the government, the move will raise CFE’s share of Mexican electricity generation to 55% from 39% previously.
Lopez Obrador has previously accused Spanish energy firms such as Iberdrola and Repsol of shady business dealings in Mexico’s energy sector.
Foreign investors have expressed concern about Lopez Obrador’s reforms targeted at undoing the effects of previous governments’ liberalization, which he claims benefited private businesses.
The moves have led the United States and Canada to file a formal trade complaint under a North American trade agreement.
Critics argue that the reforms unjustly favor state-run companies that rely on fossil fuels over private electricity producers that have invested in renewable energy.
Despite the sale, Iberdrola stated that it is “firmly committed” to the growth of renewable energy in Mexico.
The group “considers Mexico a strategic country with potential for growth and expansion, where it will show its support for Mexico and the state by developing renewable capacity,” chairman Ignacio Galan said in a statement.
Lopez Obrador thanked Iberdrola “for its willingness to reach an agreement,” adding: “We have had some differences, but dialogue and goodwill can do anything.”
Relations between Mexico and former colonial ruler Spain have been strained since Lopez Obrador took office in 2018 and called for an apology for the events of the conquest five centuries ago.
