Canadian developer Northland Power has reached a final investment decision on the 130MW La Lucha solar project in the state of Durango, Mexico.
Northland owns 100% of the project that will have a total capital cost of approximately C$190m.
The solar park is expected to complete construction in the second half of 2020.
According to Northland La Lucha will advance to construction while its development team in Mexico continues to negotiate bilateral power contracts with a range of local commercial and industrial offtakers.
Recent Mexican energy reforms have resulted in bilateral power generation and marketing opportunities, backed by growing industrial demand for power, especially from competitive renewable sources of energy.
Northland Power managing director for Latin America Javier Chavarria said: “The robust fundamentals of Mexico’s power markets give us the confidence to build La Lucha as our first attractive investment opportunity in the country.
“There is significant interest within the Mexican industrial sector to meet some of their energy needs through contracts linked to renewable power facilities like La Lucha.”
Northland originated the La Lucha project and has obtained all major permits required for construction.
The developer will initially fund La Lucha through a combination of cash and its corporate credit facility.
Subsequently, Northland expects to use non-recourse project financing to finance La Lucha once it secures offtake agreements, closer to project completion.
Northland Power chief executive Mike Crawley said: “La Lucha is the first investment opportunity to come out of our regional development offices located in Toronto, Houston, London, Seoul and soon, Tokyo.
“These offices are designed to put knowledgeable, local and experienced development teams on the ground in our identified growth markets.”