Mexican Government to Buy Power Plants From Spain’s Iberdrola

“We’ve had our differences, but everything can be resolved through dialogue,” Mr. López Obrador said.

Iberdrola Chairman

Ignacio Galán

said that given the Mexican government’s energy policies, the company looked for a solution that was good for Mexico and for the interests of Iberdrola shareholders.

“Our wish is to continue collaborating with Mexico—we’ve been doing this for 22 years—in the way that the Mexican government wishes,” he said.

Iberdrola, the largest private electricity generation company in Mexico, said the agreement is for 8,539 megawatts of capacity, including 8,463 megawatts of gas-fueled generation and 103 megawatts of wind power. Iberdrola said it would continue to develop renewable energy in Mexico with the backing of the Mexican government.

“The company continues to be the main private generator of renewable energy in Mexico, aligning with its decarbonization commitments,” Iberdrola said.

The Finance Ministry said the acquisition will be made through an investment vehicle that is majority owned by the country’s national infrastructure fund and managed by Mexico Infrastructure Partners, an investment fund manager. The plants will be operated by state electricity utility Comisión Federal de Electricidad, which will increase its share of overall electricity generation in Mexico from 39% to 55%.

“It strengthens the state’s participation in electricity generation to meet its responsibility of guaranteeing energy supply and price stability for Mexicans,” the ministry said.

Since taking office in 2018, Mr. López Obrador has sought to undo many of the changes made under his predecessor that opened Mexico’s oil and electricity sectors to greater private and foreign investment. Mr. López Obrador suspended new oil block auctions on taking office. In 2021, state oil company Petróleos Mexicanos bought

Royal Dutch Shell’s

50% stake in the joint-venture Deer Park refinery in Texas.

Changes made in electricity laws and other government actions in favor of the CFE and Pemex led the U.S. Trade Representative’s office last year to seek consultations under the U.S.-Mexico-Canada Agreement, questioning their consistency with Mexico’s commitments under the pact. Canada has also challenged Mexico’s energy policies.

Failure to reach an agreement could lead the U.S. to request a dispute resolution panel under the USMCA, which could eventually lead to the U.S. imposing import tariffs on a range of Mexican products.

—Sabela Ojea contributed to this article.

Write to Anthony Harrup at anthony.harrup@wsj.com

“We’ve had our differences, but everything can be resolved through dialogue,” Mr. López Obrador said.

Iberdrola Chairman

Ignacio Galán

said that given the Mexican government’s energy policies, the company looked for a solution that was good for Mexico and for the interests of Iberdrola shareholders.

“Our wish is to continue collaborating with Mexico—we’ve been doing this for 22 years—in the way that the Mexican government wishes,” he said.

Iberdrola, the largest private electricity generation company in Mexico, said the agreement is for 8,539 megawatts of capacity, including 8,463 megawatts of gas-fueled generation and 103 megawatts of wind power. Iberdrola said it would continue to develop renewable energy in Mexico with the backing of the Mexican government.

“The company continues to be the main private generator of renewable energy in Mexico, aligning with its decarbonization commitments,” Iberdrola said.

The Finance Ministry said the acquisition will be made through an investment vehicle that is majority owned by the country’s national infrastructure fund and managed by Mexico Infrastructure Partners, an investment fund manager. The plants will be operated by state electricity utility Comisión Federal de Electricidad, which will increase its share of overall electricity generation in Mexico from 39% to 55%.

“It strengthens the state’s participation in electricity generation to meet its responsibility of guaranteeing energy supply and price stability for Mexicans,” the ministry said.

Since taking office in 2018, Mr. López Obrador has sought to undo many of the changes made under his predecessor that opened Mexico’s oil and electricity sectors to greater private and foreign investment. Mr. López Obrador suspended new oil block auctions on taking office. In 2021, state oil company Petróleos Mexicanos bought

Royal Dutch Shell’s

50% stake in the joint-venture Deer Park refinery in Texas.

Changes made in electricity laws and other government actions in favor of the CFE and Pemex led the U.S. Trade Representative’s office last year to seek consultations under the U.S.-Mexico-Canada Agreement, questioning their consistency with Mexico’s commitments under the pact. Canada has also challenged Mexico’s energy policies.

Failure to reach an agreement could lead the U.S. to request a dispute resolution panel under the USMCA, which could eventually lead to the U.S. imposing import tariffs on a range of Mexican products.

—Sabela Ojea contributed to this article.

Write to Anthony Harrup at anthony.harrup@wsj.com