AMLO notes that Cofece approved the purchase of Iberdrola with conditions: “I didn’t even expect them to approve”

He President Andrés Manuel López Obrador noted the adoption of the resolution Federal Commission for Economic Competition (Cofece)which imposed at least six conditions for the Mexican government to complete its purchase of 13 power plants from Spain’s Iberdrola.

“I didn’t even expect them to approve,” he said this Friday during a morning press conference in National Palace.

However, the President considered that “this is progress” and therefore welcomed the Cofece resolution. In addition, he announced that on February 26 the government will pay for 13 purchased power plants.

“By the way, they (Iberdrola) behaved well because they obeyed; Now we will pay them on the 26th of this month, we will see if I go to the factory on the 27th,” he assured. “The operation is about to be closed, but it was a good step and we also thank the employees of Cofece.”

This comes after Cofece unveiled a series of provisions to ensure “that economic competition in the electricity generation market is not harmed.”

The president said the purchase was approved “miraculously” and considered the conditions to be “excuses” and “restrictions to prevent the plants from going” to the Federal Electricity Commission (FEC) because otherwise it would become a “monopoly.”

We are going to find a mechanism to enforce the law.

López Obrador reiterated that in the reform package he presented on February 5, he proposes the liquidation of Cofece, believing that this is contrary to the public interest.

On June 12, 2023, Iberdrola signed an agreement to sell 13 power plants to the country’s largest fund manager, a state-owned company Mexican Infrastructure Partners (MIF) and National Infrastructure Fund (Fonadin) costing $6 billion, which will provide 8,539 megawatts (MW).

AMLO announced the acquisition on April 4 last year and described the purchase as a “new nationalization” giving the public sector 54% of the country’s electricity production.

Cofece authorized the purchase on Thursday, although it imposed a series of conditions that oblige the buyers, MIF and Fonadin, to operate the plants independently and avoid sharing confidential or strategic information between rivals.

In this sense, buyers were required to reduce and maintain their investment by a maximum of 51%, which was to be completed in no more than two years, and to appoint an independent professional administrator to make decisions related to the operation of the 12 plants. combined cycle and wind farm acquired from Iberdrola.

You might be interested > Cofece puts forward conditions for the Mexican government to buy 13 plants from Iberdrola

He also asked for controls and mechanisms to be established so that his administration would be based on decisions made by qualified voting or with the mandatory intervention of institutional investors or independent members.

And make the operation of said power plants happen independently and without conflicts of interest.

For its part, in order to prevent the exchange of confidential information, it required the appointment of a completely independent compliance officer to verify and ensure this situation.

In addition, it required managers and people in charge of the operation of factories to refrain from taking up positions in any other competing company, and those who had been government employees for the past 4 years could not be appointed to the position.

The autonomous body clarified that these conditions are valid for 10 years and will be constantly monitored by Cofece.

Separately, in a statement, the Mexican government said “the authorization establishes obligations to strengthen corporate governance of the investment vehicle to ensure that plants operate in a competitive electricity market.”

And also “for the benefit of consumers, at the same time that the Mexican state regains its leadership in electricity production, a goal that was set in the constitutional reform initiative.”

In addition, he noted that this decision achieved the Mexican government’s goal of producing 54% of the country’s electricity, “restoring market presence in strategic areas for the relocation of companies that Mexico faces today.”

(According to EFE and Reuters)

Source: Aristegui Noticias

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