Iberdrola advanced three years into its 2023 to 2025 strategic plan by completing one leg of the program. The electricity group laid out a clear path of asset divestitures totaling 7.5 billion euros to back a time frame of record investments reaching 47 billion euros. This milestone aligns with a broader strategy of monetizing non core assets to fund growth engineering, and it has already shown early signs of success through several asset rotations in Brazil, complemented by a new alliance that expands the company’s footprint in the country.
Iberdrola forged a strategic alliance with an international investor partner, the United States based Singapore state investment fund GIC, to accelerate the development of electric transportation networks in Brazil. The joint venture structure comprises three principal components: a sale of half of Iberdrola’s Brazilian assets, an option to acquire half of the remaining grid assets in the country, and a commitment to participate together in future auctions for transport infrastructure. The alliance was announced during the official visit of Brazil’s president to Spain, underscoring the high-level political and commercial support for the deal.
three legged alliance
The jointly owned vehicle established by Iberdrola and GIC carries a reported value of 2.4 billion Brazilian reais, equivalent to about 430 million euros. Through this arrangement, both partners expect to deliver an annual return near 77 million euros, supported by an expansive network of transmission lines spanning roughly 1,865 kilometers and backed by a concession horizon of approximately 25 years. As part of the exit, Iberdrola would transfer half of these assets while recognizing a multiple of around thirteen times the gross operating profit, a metric sometimes colloquially described by market participants as a strong earnings multiple on the underlying assets.
The alliance also grants GIC the option to hold a 50 percent stake in additional assets that are still under construction or in operation, covering key transmission corridors across 6,279 kilometers. The targeted routes include Itabapoana, Guanabara, Vale do Itajaí, Lagoa dos Patos, Morro do Chapéu, Estreito, Alto do Parnaíba, Paraíso, and Potiguar Sul. Iberdrola and GIC formalized a framework agreement and agreed to participate jointly in future tenders for electricity transport infrastructure in Brazil, with a particular emphasis on the auction calendar, including the auction originally slated for mid-2023.
Officials stated that the transaction is part of a non-mandatory asset rotation program that has already reached completion, designed to support Iberdrola’s ambitious investment plan of 47,000 million euros. The company noted that following the decision to dispose of a substantial portion of its gas facilities in Mexico to a state entity for about six billion dollars, close to achieving the overall asset sale target of seven and a half billion euros. These movements reflect Iberdrola’s proactive approach to optimizing its asset portfolio while maintaining a strong growth trajectory across its core businesses in Europe, North America, and Latin America. The company reiterated that the asset rotations are aimed at sharpening capital allocation and reinforcing its leadership position in the energy transition.