June 25, 2020 / 2:19 PM / 8 days ago

Mexico eyes agreement with Spain's Iberdrola over plant

MEXICO CITY (Reuters) - Mexico’s president on Thursday said he expects to reach agreement with Spanish power generation company Iberdrola (IBE.MC) after reports that the firm had canceled a major project in the eastern state of Veracruz.

FILE PHOTO: Mexico's President Andres Manuel Lopez Obrador holds a news conference at the National Palace in Mexico City, Mexico, March 17, 2020. REUTERS/Henry Romero

This week, media reports suggested Iberdrola had canned the project after failing to reach a contract to supply power to the state power company, the Comision Federal de Electricidad, or CFE.

But, according to President Andres Manuel Lopez Obrador, no final decision has been made yet. He said a letter sent by Iberdrola officials to the government stating its openness to continue investing in Mexico was a prelude to more talks.

“There’s going to be an agreement,” Lopez Obrador told reporters at a regular morning news conference. “That’s the purpose of this letter, that they want to have dialogue. They’re even asking to talk to me.”

The president then added that he wants Energy Minister Rocio Nahle and CFE chief executive Manuel Bartlett to meet with Iberdrola first.

The company’s planned investment in the port city of Tuxpan was worth some $1.2 billion, according to local media reports.

The leftist president has accused Iberdrola of trying to mount a media campaign against his government in collaboration with his conservative adversaries.

Later on Thursday, the U.S. ambassador to Mexico, Christopher Landau, criticized the government’s energy policies as having undermined investor confidence. He did not address Iberdrola or other specific companies or disputes.

“Some actions in the past months, above all in the energy sector, have created uncertainty about the government’s promise to respect what it has done in the past and not change the rules of the game,” he said in an online presentation hosted by the National Confederation of Industrial Chambers (Concamin).

“If (Mexico’s government) really wants to draw investment, it can’t change the rules of the game.”

Reporting by Dave Graham, Ana Isabel Martinez and David Alire Garcia; Writing by Drazen Jorgic; editing by Jonathan Oatis and Cynthia Osterman

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