Iberdrola aims for US subsidies after Mexican asset sale

Spanish power company Iberdrola is turning to the United States for expansion opportunities and green subsidies following the sale of gas assets worth $6 billion in Mexico, according to CFO Jose Sainz. The move significantly reduces the renewable energy giant’s association with the Mexican government, which has been problematic. Sainz indicated that the US brought the most opportunities in the long-term due to the US Inflation Reduction Act, which included significant subsidies. The sale could potentially enable acquisitions as Iberdrola aims to grow its renewables operations in Mexico, despite the sale. According to Sainz, the sale would improve the firm’s relationship with the Mexican government, as most of the country’s regulatory problems are linked to the assets being sold. Iberdrola shares were up by 2% in morning trade following the announcement.

RBC analyst Fernando Garcia has praised the move, stating that Iberdrola has “got rid of the Mexican headache”. The company continues to target a profit of between €5.2bn ($5.69bn) to €5.4bn by 2025, confirming previous years. Sainz also confirmed that the dividend policy was unlikely to change significantly, citing that Mexico remains a core market for the company.

($1 = €0.9132)

Source: Reuters