LatinNews Daily - 16 February 2024

*Mexico’s federal competition commission (Cofece) has issued new conditions on the government’s planned purchase of 13 power plants from Spanish energy company Iberdrola. According to Cofece, compliance with these conditions will guarantee economic competition in the electricity generation market. The conditions oblige the government to operate the plants independently in the market and to avoid exchanging sensitive strategic information with competitors. To ensure this, Cofece stated that Mexico’s national infrastructure fund (Fonadin) cannot purchase more than a 51% stake in the plants; an independent professional administrator must be appointed to oversee the operation of the plants; decisions regarding the management of the plants can only be made through qualified votes or the involvement of institutional investors or independent members; and those in charge of operating the plants must act independently and without conflict of interest. Furthermore, managers and those in charge of operating the power plants must not hold positions in competing companies or have served as public officials in the past four years. Cofece said the government must accept these condition “in an express and unconditional manner” in order for the sale to go through. President Andrés Manuel López Obrador announced the purchase in April 2023, calling it a “new nationalisation”. At the time, the government stated the purchase would increase the market share of state-owned power company Comisión Federal de Electricidad (CFE) from 39% to 55%.