First Reserve seals 130MW Mexican wind deal

The buyout firm says La Bufa could represent its first of many Mexican wind partnerships with Cannon Power spinoff MPG.

US energy buyout firm First Reserve has partnered with Mexico Power Group (MPG) to build La Bufa wind farm in Zacatecas, Mexico.

Financing for the project was provided by Sumitomo Mitsui Banking Corporation, Korea Development Bank, Nacional Financiera and Bancomext. In a 2013 release, MPG estimated total investment needed for the project at roughly MXN$4.5 billion (€329 million; $360 million).

Volkswagen Group will purchase the power generated by the 130-megawatt (MW) facility through a 20-year offtake agreement, as part of its efforts to meet clean energy goals. The amount supplied is expected to meet 60 percent of total demand at Volkswagen's Pueblais factory, the largest vehicle manufacturing facility in Mexico. The plant produces 2,500 vehicles per day. 

Construction on La Bufa is already under way, with MPG as lead developer in a team including Cannon Power Group (from which MPG spun off in 2011) and Gamesa, the latter of which is providing turbines. 

“We expect this project may be the first in a platform of wind power opportunities with MPG,” said Mark Florian, First Reserve's managing director, in a statement.

The third of First Reserve's forays into the wind sector in the country to date, La Bufa will bring the firm's Mexican generation capacity to 600 MW once operational. 

Construction, which has already begun, is expected to be completed in early 2017.