JBIC signs loan for Mexican power plant

20 October 2006 — The Japan Bank for International Cooperation (JBIC) has signed a loan agreement for the construction of a 648 MW coal-fired power generation plant with Carboelectrica Diamante, S.A. de C.V. (CDSA), a Mexican corporation owned by Mitsubishi. The $611 million loan was co financed by private financial institutions including the Bank of Tokyo-Mitsubishi UFJ, Tokyo Branch of Calyon Corporate and Investment Bank and Tokyo Branch of ING Bank N.V.

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 installments 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.

JBIC said that Japanese firms have high expectations for more orders with the Japan-Mexico Economic Partnership Agreement (EPA) coming into effect in April 2005.