Spanish energy giant Iberdrola has pledged to invest US$5 billion to help Mexico overhaul its energy sector, a major development after the country’s present administration reformed the sector.
Iberdrola has wrapped up a deal with the Mexican Federal Electricity Commission (CFE), which involves electricity generation, transmission and distribution. Also included in the agreement is a plan to build infrastructure for storing natural gas, and investing money on renewable energy projects.
In a statement issued Monday, the Spanish firm also promised to put its managerial skill and new technologies to use in the energy sector. The pact was signed by Iberdrola chief executive Ignacio Galan and CFE Managing Director Enrique Ochoa Reza.
Iberdrola is not new to Mexico. The Spanish company has long been running gas-fired power plants and wind farms with a capacity to generate over 5,200 megawatts (MW) of electricity. Most of its power plants are in Monterrey and Baja California.
“In fact, the company’s initiatives already underway represent investments to the value of US$1.5 bn,” says the company’s press release.
Iberdrola will have invested all the US$5 billion by the end of 2018. Reports say the Spanish firm is hoping to invest in solar power generators and will take part in building the country’s gas pipelines.
Mexico, which passed landmark reforms to its energy sector in December last year, ending the decades-long monopoly on oil and gas, expects to see US$25.5 billion invested in its energy sector over the next six years.
The reforms have made Mexico’s energy sector more lucrative and the country’s telecom baron Carlos Slim is also said to be contemplating investing in the sector.