The Japan Bank for International Cooperation (JBIC) has signed a loan agreement for the construction of a 648MW coal-fired power generation plant (total project cost: around US$611mn) with Carboelectrica Diamante, SA de CV (CDSA), a Mexican corporation owned by Mitsubishi.
The loan was co financed by private financial institutions (Bank of Tokyo-Mitsubishi UFJ – agent bank, Tokyo branch of Calyon Corporate and Investment Bank, and Tokyo branch of ING Bank).
The project aims to construct the power plant under the OPF scheme, a contract arrangement unique to Mexico. The Comision Federal de Electricidad (CFE) will be providing the loan to procure the required equipment, and services from Japan, to construct a coal-fired power generation plant. The plant will be in Petacalco, Lazaro Cardenas, Guerrero State, Mexico
It is the first time for Japanese firms to win orders for this type of project. Under the OPF scheme, payment is made not made in instalments throughout the construction phase, but rather in a lump sum once the project has been completed. CFE therefore assume the risk of the total project cost up to the completion of construction work.
With the Japan-Mexico Economic Partnership Agreement (EPA) coming into effect in April 2005, Japanese firms have high expectations for expanded opportunities to win more orders.