Almost a month after Iberdrola closed the sale of 55% of its businesses in Mexico with the sale of 13 plants to the Government of López Obrador, the Spanish electricity company seeks to open a new chapter in the country. It is embarking on a phase of 'green' projects where wind and solar generation will take the lead. The route follows the guidelines of the multi-year investment plan that the president of the firm, Ignacio Sánchez Galán, presented this week. The project contemplates a global disbursement of 41,000 million euros, about 44,500 million dollars by 2026. Although most of these resources will be allocated to electricity transmission and distribution projects in the United States, Mexico has managed to capture 3% of this stock market, equivalent to just over 1,200 million euros [1.300 millones de dólares]
The executive director of Iberdrola México, Enrique Alba (Murcia, 52 years old), says that after four years of not appearing on the company's global map, Mexico has once again been considered. With a decade leading the company in Mexican territory, Alba looks optimistically towards the future and is confident that, with the right conditions, the country will increase its project portfolio and, therefore, the amount of investment after 2026.
Ask. What will be the priority projects for Iberdrola in the next three years?
Answer. Iberdrola continues to have a very powerful growth plan. In the next three years it will be 41,000 million euros, more than 13,000 million euros per year. 70% of the investment will go to transmission network projects. In Brazil this is a very big business and also in the United States, Spain and the United Kingdom. In addition, we are going to selectively bet on the growth in renewable energies, mainly onshore wind and offshore wind, and then photovoltaics.
Q. How will resources be distributed in America?
R. In the United States we are responsible for electrical transmission and distribution in New York, Portland, Connecticut. It is a regulated business, with high legal security, where many investments are needed to improve and strengthen the network. A relevant part of that money is going to go to the United States. In Mexico, due to a regulatory and constitutional issue, transmission and distribution activity is reserved to the Federal Electricity Commission (CFE) and, therefore, no matter how much we want to in Mexico, we cannot invest there.
Q. What are the plans for Mexico?
R. In Mexico we came from a few years where we did not appear in the strategic plan. It was evident that there was a specific political and regulatory situation with Iberdrola that did not encourage the company to want to invest in the country. Now, for the first time in four years, Mexico once again appears as an investment destination. And in this plan, of the 41,000 million euros, 3% is already allocated to Mexico. It is true that it is a modest amount compared to other countries, but it changes the trend of recent years. Without a doubt, the United States is the largest investment destination with 35%, followed by the United Kingdom with 24%, Spain with 15% and then Brazil, with 12%. Mexico is the fifth country, with 3%.
Q. The bet, however, is to grow this percentage in the following years…
R. This strategic plan sends the message that Mexico once again appears on Iberdrola's radar as an investment destination. Whether these investments can increase will depend on the Government, on whether we are given permits, on whether there is an investment environment favorable to private initiative. If that occurs, surely the amounts can increase and by 2027 and 2030 they will be much more important.
Q. What type of projects are these 1.2 billion euros going to be allocated to?
R. In Mexico we carried out an asset sale operation to the Mexican Government, where the objective was to align ourselves more with the strategy of decarbonizing our generation mix. What was sold were combined cycle plants with gas generation and now what we are going to do is focus that money on renewable energy plants, mainly wind and photovoltaic to sell that energy to private industry. We are convinced that with the phenomenon of nearshoring More energy is going to be needed and many of the companies that come, due to corporate commitments, require that this energy be renewable.
Q. How much will your park of green megawatts increase in Mexico?
R. Today we have approximately 2,600 megawatts in the country, 50% renewable and 50% gas. With these 1,200 million euros, we are talking about 1,000 to 1,200 more renewable megawatts.
Q. Inside this bag is part of what they obtained from the sale of the 13 plants to the CFE?
R. Of course, obviously our vocation is to reinvest part of what they paid us and these 1.2 billion euros is a first part of that reinvestment.
Q. And where was the rest of the money they received from the Mexican Government reinvested?
R. Part of that money went to pay the debt of the subholding Mexican, because what we sold had to be debt-free. Another part has been used in other countries where there is a need for investment. I am convinced that if there is a change of attitude in the government, the investment amounts that we could announce in subsequent years would be greater than these 1.2 billion euros.
Q. In which States will these new green projects be built?
R. We have a portfolio of 41 projects, which are approximately 9,600 megawatts. Of this portfolio there are 17 priority projects, because they are in areas of greater commercial interest because the solar and wind resources are greater. Which are? Agua Nueva, Valtierra and Guaname, one in the State of Coahuila and two in Guanajuato. It will depend on whether we are given the permits and the final studies for construction. We have plenty of portfolio to invest in Nuevo León, Chihuahua, Aguascalientes, Puebla.
Q. In the past, gas plants had many problems with permits, has this brake been corrected?
R. Everything that we have operational has already been regularized. Now what we are starting is the application for this package of new plants.
Q. Will 2024 being an election year affect the execution time of this investment program?
R. The plan is already underway because the company announced it. The pace it takes will depend on the Administrations here or in Brazil or elsewhere to give us permits. If the Government or the change of Administration takes nine months or something like that, we will have to wait, but we are ready.
Q. What will they ask of the next Government?
R. There is a coincidence between the political options in which the energy transition must be accelerated. Mexico is a country with a fantastic solar and wind resource and we have to move towards an energy model much more based on renewables. In this scenario, we ask that the private initiative be allowed to participate. We are here to help, to complement the CFE. The only thing I ask is that you see private initiative as an ally to accelerate the energy transition and reinforce the transmission, distribution and electricity generation infrastructure that the country requires to take advantage of the phenomenon of nearshoring to 100%.
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