China's State Power Investment Corp has made a move into Mexico with the acquisition of independent renewables developer Zuma Energia. The acquisition was made via China Power International Holding (CPIH), SPIC's Hong Kong-based subsidiary.
Zuma Energia is Mexico's largest independent renewable power company, owning four power projects with an installed capacity of 818MW. Two are solar facilities in Sonora and Chihuahua, while two are wind farms in Tamaulipas and Oaxaca.
The Chinese power generation company did not disclose the value of the deal, but said it will fully acquire Zuma.
SPIC had set for itself a 2020 target of having 8GW of overseas power generation capacity. By March, it had installed 5.21GW outside China and had 1.47GW projects under construction.
One of China's top five power producers, SPIC has 165GW of installed capacity. Around half of this is coal-fired, but the company is transitioning to other sources.
"The investment by SPIC in Zuma signifies our continuous commitment and support for clean and renewable power generation," says SPIC chairman Qian Zhimin.
SPIC owns 100% of CPI Holding (Hong Kong), which in turn has a 56.04% stake in Hong Kong-listed China Power International Development Limited. The acquisition gives SPIC a platform to promote clean energy development not only in Mexico, but across Latin America.
In September CPIH stepped up its global offshore wind ambitions by signing a memorandum of understanding with Norwegian energy firm Equinor to cooperate in offshore wind development in China and Europe.
Wind solar projects
Mexico has a population of 130 million, second in size only to Brazil in Latin America. Mexico has a sizeable hydropower capacity, but the government is also promoting wind and solar.
Zuma, formed in 2014, develops, structures, finances, builds and operates renewable energy projects. Its 50MW Ingenio Wind Farm began operation in 2016, and 424MW Reynosa Wind Farm opened in 2018, with turbines from Vestas.
The company is developing the 120MW La Orejana Solar Farm in the northern state of Sonora, and the 182MW Santa Maria Solar Farm in the northern state of Chihuahua.
Chinese ownership and financial resources will give Zuma a stronger competitive position versus players such as Enel Green Power Mexico.
In September Enel completed installation work on its 274MW Dolores Wind Farm in Nuevo Leon, which had a total investment of US$290 million. The wind farm is backed by a contract for the sale of specific volumes of energy to the Clearing House of the Mexican Centre for Energy Control (CENACE) for a period of 15 years, and clean energy certificates for 20 years.
It is part of the four wind plants awarded to Enel in a 2017 auction, for a total capacity of 647MW. In addition to this project, the Group was awarded the Amistad II with an installed capacity of 103MW, Amistad III with 108MW, and Amistad IV with 162MW, all located in Acuna, Coahuila, together forming the largest wind energy company in Mexico.