Iberdrola wins $270m power project in Mexico

It is the first power plant the Spanish utility has been awarded since 2004, bringing its total operating capacity to more than 5,200MW in the country.

Spanish energy group Iberdrola has won a $270 million contract to develop, build, own, operate and maintain a 330 megawatt (MW) combined-cycle gas power plant in the Mexican state of Baja California, as well as the necessary facilities to connect the plant to the country’s electricity grid, the company said in a statement.

This deal brings Iberdrola’s total operating capacity in Mexico to over 5,200MW making the company the leading private power producer in the country.
The company has also secured a 25-year power purchase agreement (PPA) with the Mexican Federal Electricity Commission (CFE), the state-owned electricity utility, which will provide the gas for the plant.

Construction of Baja California III, as the project is known, will begin in April while commercial operation is scheduled for August 2016.

Mexico, in which Iberdrola has had a presence since 1998 – mainly through combined-cycle gas power plants but also wind farms (table) – is a strategic country for the Spanish utility, as is Brazil, in terms of business growth in Latin America.

“During the 2012-2014 period, the Group’s net investment in the region will stand at €2,415 million approximately, representing 23 percent of the total projected investments (net €10.5 billion),” the company said.

Mexican President Enrique Peña Nieto has identified government spending on infrastructure as a priority since he took office in December 2012. Earlier this month, his administration published official guidelines that will be used to assess the suitability of planned public-private partnerships (PPP; P3).

The regulations aim to codify the P3 law passed by his predecessor, Felipe Calderón, in January 2012 which paved the way for the use of PPP schemes but did not specify criteria or procedures for evaluating them.

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.

Photo courtesy of Iberdrola.