09 March 2024

BBVA assists the Mexican Government, Iberdrola and Mexico Infrastructure Partners in the buy-sale of USD6.27 billion in power generation assets


The National Infrastructure Fund (FONADIN), a Mexican government agency, purchased a set of power generation assets from Iberdrola. These assets consist of 12 combined cycle power plants and 1 wind farm with a total generation capacity of 8,539 MW The amount of this transaction was US 6.27 billion. Mexico Infrastructure Partners (MIP) will manage the acquisition trust. With this transaction, the Mexican government, together with the Federal Electricity Commission, will produce more than 54% of the electricity generated in Mexico.


To purchase the assets, an acquisition trust was created in which FONADIN contributed capital in an amount equivalent to USD2.42 billion dollars. Several development and commercial banking institutions financed the loans required for the acquisition.


BBVA played a very important role in different phases of the transaction, acting as financial advisor to Iberdrola in the sale of the generation assets; second, as Global Coordinator, which, together with three other institutions, secured the entirety of the debt. Also, BBVA was the coordinating bank for the fixed-rate hedge of the long-term tranche funded by the development banks, and it was the only commercial bank that participated in the issuance of the letter of credit line. Finally, it is worth mentioning that BBVA will also participate as one of the structuring banks and underwriters of the Project Bond issuance.


Undoubtedly, this transaction represents a milestone in the country and continues to position BBVA as a leader in Investment and Corporate Banking in Mexico, as well as in the energy sector.


Our sincere recognition to the Mexican government, Iberdrola, and MIP for the closure of this transaction, which opens new opportunities in the electricity sector in Mexico.