Iberdrola aims for US subsidies after Mexican asset sale By Reuters

© Reuters. FILE PHOTO: The emblem of Spanish utility firm Iberdrola is seen outdoors its headquarters in Madrid, Spain, Could 23, 2018. REUTERS/Sergio Perez

By Pietro Lombardi

MADRID (Reuters) – Spanish energy firm Iberdrola (OTC:) will search to increase in america and benefit from its inexperienced subsidies after asserting the sale of fuel belongings price $6 billion in Mexico, Chief Monetary Officer Jose Sainz mentioned on Wednesday.

The sale considerably reduces the renewable vitality large’s publicity to Mexico, the place its relationship with the federal government has been fraught, and offers it a possibility to hurry up progress north of the border.

“The USA is the nation that brings extra alternatives within the medium and long run,” Sainz advised analysts in a convention name, referring to an enormous bundle of subsidies included within the U.S. Inflation Discount Act.

“Because of IRA, we’ll in all probability assessment our renewable plans within the U.S.,” he mentioned, including that the Mexican sale might additionally enable acquisitions.

Mexico stays a core marketplace for the corporate, which goals to develop its renewables operations there, he added.

The sale can be anticipated to enhance the corporate’s relationship with the Mexican authorities as a lot of the nation’s regulatory issues are linked to the belongings being bought, Sainz mentioned.

“We at the moment are virtually freed from any drawback with the Mexican authorities,” he mentioned.

Mexico’s president hailed his authorities’s buy of 13 energy vegetation from Iberdrola as a “new nationalisation” that may enhance state management.

For Iberdrola, RBC analyst Fernando Garcia mentioned in a analysis be aware it “removed the Mexican headache”.

The corporate “had vital issues with Mexican regulators and in our view, on condition that the valuation appears to be like respectable, it appears to be like like deal for the corporate to deploy this money in different areas,” Garcia mentioned.

Iberdrola shares have been up 2% in morning commerce.

Sainz confirmed the revenue goal for 2025 of between 5.2 billion euros ($5.69 billion) and 5.4 billion euros, up from final yr’s 4.3 billion, and mentioned the dividend coverage was unlikely to vary a lot.

($1 = 0.9132 euros)