Mexico announces ‘new nationalisation’ of electricity with bulk purchase of Spanish-owned power plants / by Morning Star Staff

Photo: Fré Sonneveld / Creative Commons

Posted in Morning Star: The People’s Daily on April 4, 2023

MEXICAN President Andres Manuel Lopez Obrador has announced a “new nationalisation of the electricity industry” with the purchase of 13 power plants from Spanish transnational Iberdrola for almost £4 billion.

Though privately owned electricity providers will still exist, Mr Lopez Obrador said that the deal will make the Federal Electricity Commission (CFE) the majority provider, “generating 55.5 per cent of the electricity for the entire country,” and thus should be deemed an act of nationalisation.

“In other words, the CFE becomes the majority company. If we add to this that final plants are being built, hydroelectric plants are being rehabilitated with new turbines, all of this in charge of the CFE, we can affirm that the Mexican state will maintain around 65 per cent of all energy generation at the end of the six-year term,” the president said in a televised address on Tuesday.

Mr Lopez Obrador’s government previously enacted an overhaul of the electrical power industry that sought to limit foreign-built renewable energy plants.

It has targeted alleged unlawful practices by Iberdrola, hitting the firm with fines amounting to almost £375 million which it is contesting.

The firm has previously been linked to EU foreign policy chief Josep Borrell, a shareholder who has an unrelated conviction for insider trading dating from before his appointment and whose hostility to left-wing Latin American governments was cited as a reason he was suitable for his position.

The US government is also filing objections to Mexican energy policy, saying acts favouring domestic firms over those from the US or Canada violate the USMCA free trade agreement between the three.

United States-Mexico-Canada Agreement,