Cubico lands $450m of debt for Mexico projects

The wind and solar facilities are among the first from last September’s electricity auction to receive third-party financing.

Cubico Sustainable Investments has secured $450 million of debt from a group of international lenders to reach financial close on 600MW of renewable projects in Mexico.

The non-recourse debt will back the 350MW Solem solar project, in central Mexico, and the 250MW El Mezquite wind farm, in the north-eastern part of the country. Both projects have power-purchase agreements awarded in Mexico’s second long-term electricity auction, hosted last September.

The North American Development Bank, Bancomext and Banobras provided financing for the wind project. The financing group for the solar project includes the Inter-American Investment Corporation, the Canadian Climate Fund for the Private Sector in the Americas, the China Co-Financing Fund for Latin America & the Caribbean, the International Finance Corporation, Bancomext, Banobras and Mitsubishi UFJ Financial Group.

Cubico, a renewables platform owned by Canadian pensions PSP Investments and Ontario Teachers’ Pension Plan, said it was also committing $200 million of equity to develop the projects, along with undisclosed minority investors. The projects are expected to be operational by the end of next year.

Ricardo Diaz, Cubico’s head of Americas, said the renewable deals are “amongst a handful” of projects from Mexico’s electricity auctions that have raised third-party financing. “We now plan to continue consolidating our presence in the market supporting the government and selected local developers,” he said.

Cubico was founded in 2015 when PSP Investments and OTPP partnered with Banco Santander. Santander seeded the platform with 18 of its own assets and sold its stake in July 2016 to the two pensions, as part of a planned exit. Its portfolio now exceeds 2.5GW.