JBIC EXTENDS BUYER'S CREDIT FOR GEOTHERMAL POWER PLANT IN MEXICO
1. Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Yasuda) signed today a loan agreement totaling US$71 million with Constructora , S.A. de C.V. (CGP) to finance a private geothermal power plant in Mexico. CGP is a wholly owned subsidiary of Mitsubishi Corporation established in Mexico solely to implement this project. The loan is co-financed with BNP Paribas, Tokyo Branch and ING Bank N.V., Tokyo Branch, with JBIC assuming US$43 million, or 60% of the total amount. The proceeds of the loan will be used to procure equipment and services from Japan for the Cerro Prieto Geothermal Power Project. Suppliers will be Mitsubishi Corp. and Mitsubishi Heavy Industries, Ltd.
2. This Project is arranged under the Build, Lease and Transfer scheme (BLT) under which a geothermal power plant with a capacity of 100MW will be built and leased to Federal de Electricidad,(CFE)for 15 years. The plant will be located approximately 30 kilometers southeast of Mexicali, in Cerro Prieto on the Baja California peninsula, where the United Mexican States border the United States.
3. Electricity demand in Mexico is expected to increase at an annual growth rate of 5.8 per cent through 2007, and peak electricity demand in 2007 is expected to expand by 1.6 fold from the demand in 1998 or from 28,800 MW to 46,230 MW. Therefore, new power generation plants to meet the rapid growth in demand are required before 2007. The governmental organization, CFE, has provided electricity in the past, but after the Mexican government amended the Electricity Public Service Law in 1992, the country has been promoting private participation in electric power projects through arrangements such as IPP ( Independent Power Plant ) and BLT. This loan is expected not only to facilitate export of power generation equipment from Japan, but also help stabilize the electricity supply in Mexico through BLT schemes and as a result contribute to Mexico's economic development.