Abraaj starts Mexican gas portfolio with 111MW greenfield investment

The Abraaj Group has invested in a 111MW natural gas-fired power plant in Chihuahua, Mexico, as part of a strategy to build a power-generation platform in that country.

Abraaj’s debut investment, a greenfield project, will anchor a power-plant portfolio that could generate as much as 500MW, to take advantage of the country’s growing demand for competitively-priced energy. The group said it invested in the first power plant through a fund focused on opportunities in Mexico.

Infrastructure Investor has reached to Abraaj for more information on that fund and will continue to update the story.

The firm is known to be raising Abraaj Latin America Fund II, a vehicle targeting $600 million that invests in businesses in Mexico, Colombia, Peru, Chile, Costa Rica and Panama. Abraaj is also raising an energy fund to develop a pipeline of about 10 projects across Africa, Asia and Mexico.

Sev Vettivetpillai, global head of the group’s thematic fund business, told Infrastructure Investor in January the vehicle is expected to post returns of between 19 percent and 23 percent.

Abraaj said it is partnering with Mexican natural gas power plant developer Emerging America to build the Mexican portfolio.

“This plant represents the first of many investments that Abraaj intends to carry out in the Mexican energy infrastructure sector,” Saad Zaman, a partner at Abraaj Group, said. “Buoyed by a strong regulatory framework, the Mexican energy infrastructure sector is a long-term and sustainable investment opportunity.”

The energy fund Vettivetpillai described will focus on developing combined-cycle gas plants, but would also invest in renewable energy projects. In September, Abraaj announced a partnership with ENGIE Group to develop a 1GW wind power platform in India.