London-based Cubico raises US$ 450 million for two renewable energy projects in Mexico

10 August, 2017

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Cubico Sustainable Investments, a London-based firm specialized in renewable energy projects, announced it has achieved financial closing for the 250 MW El Mezquite wind farm in the state of Nuevo Leon, and the 350 MWp Solem solar PV project in Aguascalientes, both with power purchase agreements (“PPAs”) awarded in Mexico’s 2nd long-term electricity auction in September 2016.

The total amount of non-recourse project finance debt raised was US$ 450 million, US$ 220 million for El Mezquite and US$ 230 million for Solem.

"We are very proud of having reached this ground-breaking milestone for two of our projects which are amongst a handful, from either the 1st or 2nd auction in Mexico, that have been able to raise third party financing; confirming Cubico’s leadership in the renewable energy sector in Mexico", Ricardo Diaz, Head of Americas at Cubico said in a statement.

El Mezquite wind project will be financed by the North American Development Bank and two Mexican development banks, Bancomext and Banobras. Meanwhile, the group of lenders of the Solem solar PV project is comprised of the Inter-American Investment Corporation, acting on behalf of the Inter-American Development Bank (IDB) Group, alongside the Canadian Climate Fund for the Private Sector in the Americas and the China Co-Financing Fund for Latin America & the Caribbean, the International Finance Corporation, Bancomext, Banobras and Mitsubishi UFJ Financial Group (“MUFG").

In addition to the debt amount, Cubico will invest, along with other minority partners, close to US$ 200 million of equity to construct these projects to have them operational by the end of 2018.

"This titanic effort from all parties involved stands a tangible proof of the bankability of the PPA awarded in the auction and the new legal framework that enabled us to raise competitive financing. We are also very excited by the fact that the Solem project developed by our minority partner, Alten Renewable Energy, will be the largest solar PV to be built in Latin America,” Osvaldo Rance, Head of Mexico at Cubico, added.

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