Cubico wins $700m of Mexican wind, solar contracts

The joint investment platform between two Canadian pensions said it will raise $500m and commit $200m in equity to construct the projects.

Cubico Sustainable Investments has won over half a gigawatt of renewable energy power purchase agreements in Mexico’s second long-term electricity auction.

The renewables investment vehicle, owned by Canadian pensions Public Sector Pension Investment Board (PSP Investments) and the Ontario Teachers’ Pension Plan (OTPP), has secured the rights to build a 250MW wind project and a 290MW solar project. Combined, the projects represent around a $700 million investment.

Cubico said it will raise $500 million to develop the projects and will invest, along with minority partners, $200 million in equity to start construction early next year. Its goal is to have them operational between 2018 and 2019.

The Mezquite wind project is located in the northeastern state of Nuevo Leon and is added to an 800MW portfolio of projects Cubico is already developing. The Solem solar project, located in Aguascalientes in central Mexico, is a joint venture between Cubico and independent power producer Alten Energias Renovables.

Osvaldo Rance, head of Mexico at Cubico, said in a statement, “This is the beginning of a new era for Cubico in Mexico that sets solid foundations and moves forward with our growth plan and long-term investment strategy in the country.”

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 to the two pensions, as part of a planned exit.

Its portfolio surpassed the 2GW mark last month after it announced the acquisition of a 67MW wind farm in Spain. It also has assets in operation or under construction in Brazil, Italy, Ireland, Mexico, Portugal the UK and Paraguay.

Cubico, which has directed a good deal of attention so far to South America, has also said it is looking for opportunities in India, Eastern Europe and now Spain. Cubico is headquartered in London and has offices in Sao Paulo, Milan and Mexico.