Exclusive: Thermion in $500m debut fundraise

The Mexican renewables company is tapping both local and overseas institutions with a view to reaching its target by fall 2016.

Thermion, a Mexican power producer, is looking to collect about $500 million in equity through a combination of domestic and international vehicles, Infrastructure Investor has learnt.

The funds aim to recruit local and overseas investors to build out and own an independent power producer (IPP) platform with over 700 megawatts (MW) of low-carbon and renewable power projects in Mexico.

Sources with knowledge of the fundraising process told Infrastructure Investor that the company is witnessing interest from Mexican pension funds, who are to invest through a vehicle named Thermion Energy CKD, as well as private and institutional investors from North America and Western Europe, who will channel their commitments via Thermion Energy Fund I.

It is understood that the company aims to deliver an IRR of about 14 percent through the integrated portfolio, with aspirations of higher returns upon exiting the assets. 

The liberalisation of the Mexican power market represents “a unique opportunity for [Thermion's] investors to profit from one of the most significant electrical capacity build-outs in the OECD during the next 15 years”, a source said. Mexico is scheduled to more than double its existing installed capacity from 64 gigawatts (GW) to over 128 GW, an upgrade that is said to require investments of more than $150 billion.

Thermion's existing portfolio includes wind, natural gas and solar projects in various stages of development. The company's targeted off-takers are private customers in the industrial and commercial sectors as well as the Federal Electricity Commission (CFE), Mexico's national power utility. 

Founded in 2013, Thermion's management team is made up of industry veterans who have been active in the build-out and operation of Mexico's private power generating facilities for the past 20 years.