Construction has begun on Mexico's 420MWdc La Esperanza Solar project after Copenhagen Infrastructure Partners (CIP) reached a final investment decision and secured financing through the Growth Markets Fund II (GMF II).
The project, representing CIP's first project in Mexico to reach financial close, includes a 150MW/750MWh battery energy storage system (BESS) capable of storing energy for five hours.
Located in the state of Campeche on the Yucatán Peninsula, La Esperanza Solar is currently under construction, with commercial operations expected to begin in 2028.
Funding for the project includes around $510m in debt provided by a group of five international and regional banks: JPMorgan Chase Bank, Santander, BNP Paribas, Natixis CIB and Scotiabank.
Equity funding is being provided by Copenhagen Infrastructure GMF II, with an anticipated co-investment from Mexican pension fund manager Profuturo.
The battery component of the project is among the largest in Mexico, and is expected to support the grid by delivering energy during periods of high demand as well as contributing to system stability.
Electricity consumption on the Yucatán Peninsula has been rising, driving greater demand for new power generation and energy storage capacity.
A long-term power purchase agreement (PPA) with CFE Calificados, the commercial division for major customers of the Comisión Federal de Electricidad (CFE), supports the project.
Mexico's Ministry of Energy (SENER) has recognised La Esperanza Solar as a priority initiative within the country's binding planning framework, and development is taking place in cooperation with federal authorities.
CIP Latin America head and managing director Peter Halmø said: "This is a major milestone for GMF II and our team.
"We have been active in Mexico for several years, and this will be our first project in the country to start construction – a step that reflects both the strength of the team and project and the close collaboration with contractors, authorities and partners.
"Pairing solar with battery storage is central to bringing more renewable energy onto the Mexican grid, and we are proud to help build a more reliable, lower-carbon power system."
La Esperanza Solar represents one of the largest combined solar and BESS projects in Mexico, and is seen as part of efforts to bolster the national electricity grid through new energy infrastructure and long-term investment.
"Construction begins on 420MW solar and BESS facility in Mexico" was originally created and published by Energy Monitor, a GlobalData owned brand.