2030 Finance | December 3, 2018

European Investment Bank backs solar transition for Mexico

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, December 2 – The European Union’s bank is committing $87 million in debt financing for three solar power plants in Mexico. The three plants include the combined 828-megawatt Villanueva I and Villanueva III projects—the largest solar park in North and South America—and the 260-megawatt Don José project in Mexico’s central state of Guanajuato.

Mexico is aiming to become 35% renewable energy-powered by 2024 and 50% by 2050. The country can produce 25% of its power from renewable sources, but solar capacity accounts for only 2.5% of that amount. Most of Mexico’s renewable energy comes from hydropower and wind.

The projects are owned by Canadian pension fund CDPQ, Mexican pension fund CKD Infraestructura México’s investment group, and Italian energy company Enel. The partners inked an ownership agreement for the plants once they were completed in September as part of a 1.8-gigawatt renewable energy partnership worth $2.6 billion.

The plants are backed by a 15-year power purchasing contract, ensuring that the power generated would be used.

The European Investment Bank (EIB) invested in the plants as part of a commitment to invest 25% of its capital in climate change mitigation and adaptation initiatives. Last year, €19.4 billion ($22 billion) of the EIB’s invested capital, or 28% of its 2017 investments, was climate-aligned.

BBVA Bancomer, CaixaBank, Natixis, MUFG Bank, IDB Invest, the Inter-American Development Bank, and Mexican development institution Bancomext also invested in the three Mexican solar plants.