Iberdrola Clears Out of Mexico: State Control Redraws the Energy Map

Europe’s largest utility, Iberdrola, hired Barclays to manage the sale of its last 15 renewable power plants in Mexico.

With assets valued at around €4 billion ($4.7 billion), this move signals the final step in the company’s exit from the country. Official records confirm that Iberdrola already agreed to sell 55% of its Mexican portfolio to the Mexican government for $6.2 billion in 2024.

This transfer handed control of major gas and wind sites to the Federal Electricity Commission (CFE). The new deal involves wind, solar, and cogeneration sites with total installed capacity of approximately 2,600 megawatts.

Mexico’s government has fundamentally shifted its energy policy since late 2024. Official legislation enacted in March 2025 requires CFE to generate at least 54% of all electricity fed to the national grid.

Private companies now remain restricted to a minority share of 46%. Authorities also eliminated energy regulators, replacing them with a new state-driven commission that centralizes decision-making directly under the Executive Branch.

These changes cancel out the liberalization rules set a decade ago, which once encouraged foreign firms like Iberdrola to invest in Mexico’s generation sector.

Business documents confirm that Iberdrola, after years of operating power plants through commercial arrangements with CFE and private customers, faced growing legal and tax pressures.

Mexico’s Energy Market Shifts Toward State Control

The government investigated the utility for alleged irregular contract structures and levied fines. At the same time, Mexico enacted constitutional reforms that made it increasingly difficult for foreign investors to maintain or expand their market share.

Now, CFE and the Energy Ministry can buy private assets, plan all major investments, and steer grid operations. Although government officials claim that tighter state control secures energy independence and lower power prices, business analysts see things differently.

They warn of increased investment risk. The main market shift centers on the state’s push to integrate clean power with new oversight rather than private capital.

Industry data show CFE contributed only a small portion of new generation projects over the last five years, raising questions about its capacity to hit ambitious targets for clean energy growth and reliability.

The country’s energy strategy highlights planned additions of up to 22 gigawatts of new power by 2030, most of it under government direction. Investors now see limited space for pure private ventures and expect prolonged negotiation phases for partnerships with CFE.

These regulatory changes, as found in official government records, mean any future foreign involvement will need to adapt to a model that favors long-term state control.

The final sale by Iberdrola closes an era in which Mexico’s electricity market called on foreign capital as a growth driver, setting the stage for a more centralized, government-led system.