First Reserve partners on 130-MW wind project in Mexico

First Reserve, a global private equity and infrastructure investment firm, on Dec. 2 announced a partnership with Mexico Power Group (MPG) to build the 130-MW La Bufa wind farm in Zacatecas, Mexico.

Upon completion, La Bufa will sell its generated power under a contracted off take agreement to Volkswagen de México, helping the carmaker meet its targeted renewable energy standards. The Volkswagen plant in Puebla is the largest automobile factory in Mexico and also one of the largest vehicle plants in the Volkswagen Group. Volkswagen also operates an engine plant in Silao, Guanajuato. Construction on the project has already commenced with completion currently targeted for early 2017.

The project represents the third wind farm First Reserve has partnered on in Mexico and is expected to bring the firm’s total generated wind power in Mexico to over 600 MW once in operation. This announcement also deepens First Reserve’s presence as an energy infrastructure investor in Mexico, following the announcement earlier this year of its participation in the Los Ramones II pipelines project and the US$1 billion Memorandum of Understanding announced with Petróleos Mexicanos (Pemex).

MPG, an experienced player in the renewable energy industry, will construct the facility in partnership with Cannon Power Group and Gamesa, a global wind technology leader, who is supplying the turbines. Financing is being provided by Sumitomo Mitsui Banking Corp., Korean Development Bank, Nacional Financiera and Bancomext.

Mark Florian, Managing Director and Head of Infrastructure Funds for First Reserve, said: “We are pleased to be entering into long-term partnerships with world-class organizations including MPG, Volkswagen de México and Gamesa to build the first wind farm in this region. We expect this project may be the first in a platform of wind power opportunities with MPG, and we are excited to be enhancing the renewable footprint of both Volkswagen de México and the country of Mexico.”

Gerry Monkhouse, CEO of MPG, added: “Mexico Power Group is very happy to be working with First Reserve in developing the largest wind park in Mexico producing energy that is going to a single manufacturing facility.”

First Reserve is the largest global private equity and infrastructure investment firm exclusively focused on energy. With over 30 years of industry insight, investment expertise and operational excellence, it said it has cultivated an enduring network of global relationships and raised approximately US$31 billion of aggregate capital since inception. Its portfolio companies span the energy spectrum from upstream oil and gas to midstream and downstream, including resources, equipment and services and infrastructure.

Mexico Power Group’s wind energy development activities in Mexico began over 15 years ago as a subsidiary of Cannon Power Group, a San Diego-based wind energy company with over 30 years experience developing and operating projects in the international market. In 2011, Cannon spun off its Mexico development activities to Mexico Power Group, a newly-formed Mexico-based company, separately owned and operated by Cannon’s chairman, Gerry Monkhouse. Brian O’Sullivan, a long-time wind industry leader, is a co-owner of MPG along with Monkhouse.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.