Spanish energy company cancels $1.2 billion investment in Mexico due to President's attacks

Spain's Iberdrola is curbing its investments in Mexico after the hostility of President Andrés Manuel López Obrador. The Mexican leader, who often censors the business incursions by Spanish companies like OHL into the country, has strongly criticized the energy company, which has halted a US$1.2 billion investment in the region in protest against the government's strategy.

Iberdrola was in charge of creating a power plant in Tuxpan, Veracruz, but ultimately declined to undertake the project because of discrepancies with the country's energy policy and after AMLO's multiple rants.

On Thursday, López Obrador revealed that he received a letter from Iberdrola asking for a meeting, but the president declined to meet and referred them to the Secretary of Energy, indicating his position to the foreign business community. In addition, he has denied the veracity of the Spanish company's resignation in the country, claiming that the company had not informed him of his decision in the letter.

"There is no notification in the sense of a cancellation. They would have told me that in view of the differences we have, which are in the open, they had cancelled and that is not what they are expressing to me," he said, thus contradicting the governor of Veracruz who made the announcement official on Wednesday. On the contrary, he said Iberdrola was willing to reach an agreement: "They told me that they have around 26 thermoelectric plants in the country and that they are willing to continue investing in Mexico and also willing to reach agreements with the government".

Later on, he sent a strong message to the company: "Let it be well understood, let it be heard loud and far: Mexico is not a land to be conquered. They're not going to come and plunder us, this is over. We have to take care of the assets that belong to the Mexican people".

The disagreements between Spanish companies and the Mexican government are increasingly evident. The president accuses them of having been benefited by previous Mexican presidents such as Felipe Calderón and Enrique Peña Nieto. This criticism is not new, but it is starting to make a dent in the companies based there.

"They had the big business of charging very high prices for electricity, we even had to pay them subsidies. They were in collusion with the authorities to destroy the Federal Electricity Commission," he once said in reference to Spanish companies, before pointing directly to Iberdrola, which he accused of launching a campaign against him. "I have information," the president said a few days ago during one of his morning press conferences. "But the do it undercover, because conservatism has two characteristics: it is very corrupt and hypocritical, I have to say it, let the people know it".

The president often points out that this company was one of the favoured ones during Felipe Calderón's administration. The former president then went on to serve on the Board of Directors of one of Iberdrola's subsidiaries in the United States.

The president's statements against several companies have not stopped since he arrived at the National Palace in December 2018, and have caused a rupture of the "honeymoon" between the administration and the business sector.Despite this deterioration, López Obrador persists in his discourse that he is putting order into a sector plagued by corruption and that in the past the government was dedicated to favoring private companies, undermining state-owned corporations such as Pemex and CFE.