Iberdrola asks a US judge to stop its star project (4,000M): the accounts do not work out.

Ignacio Sánchez Galán has repeatedly explained that Iberdrola invests more in the United States than in Spain due to the legal uncertainty of the country where the electricity company has its historical headquarters. However, the energy company has just gone to court to stop the implementation of one of its major projects in the United States, the creation of an offshore wind farm valued at 4,000 million dollars. The first Spanish electricity company is requesting a halt because the infrastructure has become a ruinous investment due to the rise in interest rates.

According to a brief to the Superior Court of Suffolk, New York, Avangrid, Iberdrola's U.S. subsidiary, has requested the judicial suspension of the permits to build this wind farm with a capacity of 1,232 megawatts (MW) and which would supply 755,000 inhabitants of Massachusetts. The project, known as Commonwealth Wind, awarded in December 2021, is one of the great achievements on the other side of the ocean of the multinational company presided by Sánchez Galán, which includes this infrastructure as one of the most important within its investment plan in the United States for 21,500 million dollars.

Commonwealth Wind, awarded in December 2021, is one of the multinational's major achievements on the other side of the ocean.

The request to the New York court comes after it filed a motion last October with the Massachusetts Department of Public Utilities to suspend the project until it could renegotiate the financing conditions, considering that the project would now be ruinous for Iberdrola. Mainly because of "historic increases in global commodity prices, sharp and sudden increases in interest rates, and prolonged supply chain constraints."

However, the U.S. authorities declined their request on December 30, while the companies that had committed to buy the electricity generated by Commonwealth Wind at a fixed, locked-in price did not agree to modify the conditions. Iberdrola argues that this infrastructure is the best option for Massachusetts to achieve its ambitious climate change goals, but that its implementation is unfeasible due to changes in the financing markets, given that interest rates have gone from negative to over 4.5%, after eight consecutive increases by the US Federal Reserve. As a result, Avangrid has appealed to this Suffolk court to at least seek an interim injunction that will not force it to start work next April.

In the midst of this battle, Iberdrola issued a statement last Monday in which it assured that"regulatory stability and the commitment of the different administrations to decarbonization have contributed to Iberdrola, Europe's leading electricity company and one of the four largest in the world by market capitalization, reinforcing its commitment to the United States, the main destination for the group's investments".

Photo with Biden, not with Sánchez

The statement, in which the Basque electricity company added that the number of Avangrid employees already exceeded 7,500 and that its investments generated 70,000 jobs in the country, was accompanied by a photo of Sánchez Galán with Joe Biden, President of the United States. Two weeks ago, the president of Iberdrola stood up Pedro Sánchez at the Davos forum (Switzerland), with whom he is in direct confrontation, considering that Spain does not provide legal stability to the sector, due to the increase in taxes on energy companies.

Iberdrola, with a debt of 45,000 million euros, has initiated a plan to sell assets for 8,000 million euros to reduce its liabilities.

Iberdrola, with a debt of 45,000 million euros, has initiated a plan to sell assets for 8,000 million euros to reduce its liabilities and obtain partners with whom to share its investment effort. To this end, it has reached an agreement with Norges Bank to develop a portfolio of projects in Spain for 600 million euros, has put part of its gas, wind and solar business in Spain on the market and is also considering divesting part of its renewable energy division in the United States. Although it claims that 80% of all its debt is at a fixed rate, the remaining 9,000 million is at a variable rate, so costs have soared.

One of the star operations of its new strategic plan until 2025 is the acquisition of PNM Resources, the U.S. company whose comprafue paralyzed in December 2021 by the Federal Court of Texas due to the reputational problems of Iberdrola, immersed at that time in the Villarejo case. However, the electricity company has been freed from that problem after the National Court decided that any alleged crime would already be statute-barred, so the takeover of PNM has become a key objective for this year. The merger agreement expires on April 20.

Ignacio Sánchez Galán has repeatedly explained that Iberdrola invests more in the United States than in Spain due to the legal uncertainty of the country where the electricity company has its historical headquarters. However, the energy company has just gone to court to stop the implementation of one of its major projects in the United States, the creation of an offshore wind farm valued at 4,000 million dollars. The leading Spanish electricity company is requesting a halt to the project because the infrastructure has become a ruinous investment due to the rise in interest rates.