The Mexican government agreed to purchase 13 power plants from the Spanish energy company Iberdrola for $6 billion on Tuesday (April 4), giving its state-owned power company, Commission Federal de Electricidad (CFE), majority control over the country’s electricity market.
Mexican president Andres Manuel Lopes Obrador (AMLO) called the decision part of a “new nationalization” of some of the country’s major industries, including mineral and oil production, according to Reuters.
The acquisition of the power plants will give CFE control of more than 56% of Mexico’s total production—up from approximately 40%, and surpassing AMLO’s previously stated goal of 54%.
The US and Canada have strongly opposed AMLO’s actions, and have threatened a trade war if Mexico continues to roll back access for international corporations in Mexico’s power and oil markets.
Iberdrola said the power plants would be taken over by CFE within five months as it looks to reduce its operations in Mexican energy markets. The company’s CEO, Ignacio Galan, said that the deal was a win-win.
“That energy policy has moved us to look for a situation that’s good for the people of Mexico, and at the same time, that complies with the interests of our shareholders,” Galan said after a joint appearance with AMLO announcing the deal.
AMLO has repeatedly compared Iberdola’s power over Mexican resources to Spanish conquistadors of the 16th century, even threatening to pause diplomatic relations with Spain over perceived neo-colonial actions by foreign energy firms.