Mexico and Brazil

Iberdrola adding capacity in Mexico, eyes additional plant

Bnamericas Published: Thursday, April 25, 2019

Spain’s Iberdrola is set to add 1.99GW of capacity in Mexico, mostly from thermal plants, during 2019. The company is also mulling building another plant.

Iberdrola is planning to add 1.777GW from combined-cycle and cogeneration plants in Mexico during the remainder of 2019, with an additional 779MW set for 2020 and 1.135GW more in 2021, according to a presentation from the company’s 1Q results.

“In terms of a new potential power plant, we have several projects in Mexico and we are already in this moment in construction,” said Iberdrola CEO Ignacio Galan in a call with analysts. “We have another one in the pipeline and we will probably take a decision soon.”

He said the decision on another plant in Mexico would depend on demand from industrial users, which make up a large part of the company’s client base. The presentation projected another 1.914GW of thermal capacity from natural gas plants would be added in in 2020 and 2021 for a total of an additional 3.691GW by 2022.

First quarter revenues from Iberdrola’s Mexico generation and supply business rose nearly 28% from the same period last year to almost 625mn euros (US$696mn) and Ebitda was up 67% to 162mn euro. 

Iberdrola added 70MW of onshore wind capacity during the quarter in Mexico and the presentation said 214MW more would be added during the year and 202MW in 2021.

Renewables revenue in Mexico rose 69% 35.3mn euros after an additional 270MW of solar capacity was added last year and boosted margins.

In Brazil, Iberdrola added 245MW of hydro capacity during the first quarter and projects 367MW more in 2020. The presentation forecast an additional 472MW of onshore wind power in Brazil in 2022.

Renewables revenues in Brazil were up 4.6% to 60.2mn euros as higher hydro and wind production offset a slump in the real currency. Generation revenue in Latin America’s biggest economy fell 26% to 140mn euros after gas restrictions at the Termopernambuco plant.

Overall, Iberdrola reported a 15% increase in quarterly net profit to 964mn euros. The strong performance pushed the company to raise its earning’s guidance from mid- to high-single digits.

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