IDB financing will help finance construction of 396 megawatt wind farm in Oaxaca
The Inter-American Development Bank (IDB) has approved a loan of up to 1.1 billion Mexican pesos (or approximately $72 million) to help finance the construction of a 396-megawatt wind farm in Mexico, a project that will expand renewable energy supply in the country and contribute to reduce emissions of greenhouse gases.
The project, the biggest wind farm in Mexico and one of the largest in Latin America, will be located in the La Ventosa region of Oaxaca state, one of the world’s best region for wind resources. The farm will supply energy to subsidiaries and affiliates of Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA) and Cervecería Cuauhtémoc Moctezuma (CCM - Heineken) under 33 self-supply agreements, helping the beverage companies save an estimated 10 percent of their total energy costs.
“This operation, given the size of the project, is a significant step in the development of viable renewable energy projects in Latin America.’’ said Jeff Easum, the team leader of the project at the IDB’s Structured and Corporate Finance Department. “We are helping Mexico harness its abundant wind energy resources to meet growing energy demand while reducing fossil fuel imports for electricity generation.”
The project, forecast to reduce emissions by up to approximately 1 million metric tons of carbon dioxide annually, will be made up of 132 towers with turbines and include the construction of a 52-kilometer transmission line linking the farm with the electricity grid. The IDB loan which it does not carry a sovereign guarantee and it will be granted to Mareña Renovables Capital, S.A.P.I. de C.V., controlled by Macquarie Mexican Infrastructure Fund and other investors.
The operation is part of growing IDB support to help Mexico develop its renewable energy industry. The Bank has been supporting Mexico in developing the regulatory and institutional framework necessary to incorporate renewable sources of energy into the energy matrix as well as implement its Renewable Energy Law. In 2009 the IDB approved $101 million in partial financing for two private sector wind power projects in Oaxaca, with total installed capacity of 318 MW.
About the Structured and Corporate Finance Department
The Structured and Corporate Finance Department (SCF) leads all IDB non-sovereign guaranteed operations for large scale projects, companies and financial institutions in Latin America and the Caribbean. SCF plays a catalytic role, helping mobilize resources from third parties by partnering with commercial banks, institutional investors, co-guarantors, and other co-lenders for projects with high developmental impact.