The First Reserve Energy Infrastructure Fund of First Reserve, a private equity firm focused on energy, and renewable energy developer Renovalia Energy, have expanded their Renovalia Reserve joint venture with the addition of two wind power plants in Southern Mexico.
The investments diversify the Renovalia Reserve portfolio beyond Europe into North America and nearly double the power capacity of the wind farm assets worldwide. Financial details of the transaction were not disclosed.
The first 90 MW farm in Mexico has been operational since June 2012. The second 137.5 MW farm is under construction and expected to be fully operational in early 2014. The 228 MW of the combined farms will be enough to power between 287,000 – 359,000 Mexican households annually.
The 90 MW wind energy operation in Mexico has long-term financing already in place and similar financing is anticipated for the second wind farm. The agreement periods cover a 15-18 year period with 5-10 year additional extensions at the option of the off-takers.
The two wind power plants are located in Oaxaca, Mexico, a region with historically robust wind resource with average annual wind speeds of around 10 m/s (meters per second). In fact, the U.S. Department of Energy rates this region of Oaxaca in the highest quality category worldwide in terms of wind energy resource.
Experts predict that Mexico will need 45 GW of new electricity capacity within the next 15 years to meet future demand. Mexico recently passed a carbon law that mandates 35 percent of energy to come from renewable sources by 2024.