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The Japan Bank for International Cooperation (JBIC) has signed a loan agreement totalling US$210mn with Electricidad Sol de Tuxpan (EST), a company in which Mitsubishi Corporation and Kyushyu Electric Power have joint stakes. The loan will be co-financed with Mizuho Corporate Bank (as the lead bank), Bank of Tokyo-Mitsubishi and the Tokyo branch of Standard Chartered. 
JBIC also provides a guarantee that covers political risk in Mexico for the portion financed by the private financial institutions. 
Using this loan, EST will construct a natural gas-fired combined-cycle thermal power plant with a 495 MW-capacity in Tuxpan, State of Veracruz, 250km northeast of the capital Mexico City, and sell the electricity generated at the plant to the Federal Electricity Commission for a period of 25 years. The loan will consist of long-term funds on a project finance basis.
In the light of Mexico’s good economic outlook, power demand in the country is projected to grow at an annual average of more than 5% until 2012. The Government of Mexico is planning to increase its power generation capacity during this period by 50% (from 41,177MW in 2002 to 62,730MW in 2012). 
To meet this rising power demand, the government has been actively promoting independent power producer (IPP) projects since 1992, when the Electricity Law was amended.  Following government policy, the project is undertaken on the basis of a BOO (build, own and operate) scheme and will thus contribute to achieving a stable power supply in Mexico.
Japanese firms regard the Mexican power sector as a promising market and have been making active investments in IPP projects in Mexico. Accordingly, JBIC has extended financial support over the years to meet their needs.  This is the fifth IPP project that JBIC has financed in Mexico.