Canadian energy producer Northland Power has reached a final investment decision (FID) on the La Lucha solar project in the state of Durango, Mexico.
La Lucha is a 130MW solar project that is completely owned by Northland and will have a total capital cost of nearly $141m (C$190m).
With the FID, the project will now proceed to construction. The Canadian power company noted that it has secured all major permits required for the construction of the project.
Northland Power Latin America Development managing director 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.”
Construction works at the plant will begin soon and is expected to be completed in the second half of next year. The project will be financed by Northland through a combination of cash and its corporate credit facility initially.
Later as it nears project completion, the company expects to utilise non-recourse project financing to fund La Lucha after it secures offtake agreements.
Northland president and CEO Mike Crawley said: “Today’s decision represents an exciting step in the evolution of Northland’s generation business with our first project focused on the commercial and industrial customer segment.
“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. This also represents our first step towards moving closer to the end customer in select markets to drive more accretive growth.”