FOR IMMEDIATE RELEASE April 30, 2000
Marianna Ohe (202) 565-3200
US exporters will supply $204 million of equipment and services to build a 601-megawatt combined cycle power plant in San Louis de la Paz, Mexico, financed by a loan guarantee from the Export-Import Bank of the United States (Ex-Im Bank). Bechtel International Inc., Gaithersburg, MD, the primary exporter, will design and build the Bajio Power Plant in the state of Guanajuato 160 miles northwest of Mexico City. General Electric Power Systems, Schenectady, NY, will supply gas turbines and a steam turbine totaling $119 million. Scores of other US companies will also will supply equipment for the project.
The sponsors of the project are InterGen Energy, Inc., Boston, MA, owned by Bechtel Enterprises Inc. and Shell Generating Ltd.; and AEP Resources, Inc., a subsidiary of American Electric Power Co., Inc., a large electric utility in Columbus, OH. The sponsors jointly own the project company, Energia Azteca VIII, S. de R.L. de V.C. The guaranteed lender is Citicorp, Chicago, IL.
The transaction is a limited recourse project financing in which repayment comes from project revenues, in this case from the purchase of electricity by Mexico's state-owned Comision Federal de Electricidad (CFE) under a 25-year power purchase agreement (PPA). Bajio is Ex-Im Bank's first project in Mexico to have a PPA with CFE. Also new is the plant's plan to sell nearly 20% of total capacity through merchant sales, or self supply agreements, to third party buyers that are also partial owners of the plant. The financing covers both the construction and operating periods of the project, a new Ex-Im Bank feature. It is one of several projects with a build-own-operate structure launched by CFE since 1997 under its Independent Power Project Program.
This is the first of a new generation of Independent Power Projects in Mexico that will open up more opportunities for US exporters while helping Mexico increase power production for its people, said Ex-Im Bank Chairman James A. Harmon. There is fierce competition among industrial country companies for Mexican independent power projects. CFE estimates it will need 13 gigawatts of additional capacity by 2006 to meet national requirements.
Ex-Im Bank support was needed because long-term commercial project financing is not available for projects in Mexico. The $240 million comprehensive Ex-Im Bank guarantee covers up to 85% of eligible US content for the project as well as interest during construction and some local costs and other fees.
Ex-Im Bank is an independent US government agency that helps finance the sale of US exports to developing markets throughout the world by providing loans, guarantees, and insurance. In fiscal year 1999, Ex-Im Bank helped to finance nearly $17 billion of US exports worldwide.