Just five months after winning a $270 million contract for a gas power plant in Mexico, Spanish energy group Iberdrola has signed an agreement with the state-owned Federal Electricity Commission (CFE) that will allow the two entities to exchange information on implementing new technologies as well as requiring an investment of $5 billion by Iberdrola in Mexico’s energy sector between 2014 and 2018.
The agreement focuses on electricity generation, energy transmission and distribution, and natural gas storage and provides the two parties the option of completing joint projects, the Spanish utility said in a statement.
“This agreement strengthens Iberdrola’s commitment to Mexico, where it has an operating capacity of over 5,200 megawatts (MW) in the form of combined-cycle power plants and wind farms,” the company said.
The Spanish company has had a presence in Mexico since 1998. The most recent project it was awarded was to develop, build, own, operate and maintain a 330MW combined-cycle power plant in the Mexican state of Baja California. The facility, known as Baja California III, is expected to become operational in August 2016.
The Mexican state-owned electricity utility, with which Iberdrola has signed a 25-year power purchase agreement (PPA), will provide gas for the Baja California project.
“Iberdrola’s willingness to invest in Mexico is based on the good prospects being generated by the Energy Reform being implemented by President Enrique Peña Nieto’s government,” the Spanish company said.
Headquartered in Bilbao, Iberdrola has an international presence with lines of business that include: electricity production through renewable and conventional sources; transmission and distribution of electricity; wholesale and retail sales of electricity and related energy services; and engineering, construction, and operation of energy facilities.