Mexico state utility, Comission Federal de Electricidad (CFE), has secured $273m partial financing from Japanese banks for a coal-fired plant in southern Guerrero.

The Carboelectrica del Pacifico project will generate 651MW of power and is being built by Mitsubishi for CFE, according to Dow Jones.

CFE will complete the $611m investment in the plant with the issue $338m in local bonds.

CFE had chosen coal to fuel the plant with the aim of diversifying its fuel options and the plant can also operate on fuel oil, according to Dow Jones citing CFE.

The plant is due for completion in early 2010.