A new partnership between U.S.-based power company AES Corp and Mexico’s Grupo Bal launched on Monday will invest up to $2.5 billion over the next five years mostly in Mexico’s newly opened power sector, a top AES executive said in an interview.
The 50/50 joint venture with Grupo Bal aims to direct about three-quarters of the five-year investment plan to electricity generation from both conventional and renewable sources, including wind and solar power.
“In terms of scale, the idea is to grow our portfolio in the next five years at least by 2 gigawatts with estimated investment of between $2 billion and $2.5 billion,” said Juan Ignacio Rubiolo, head of AES’s Mexican unit.
AES, which has operations in 18 countries, will operate the power plants that the partnership builds. All new projects will require the agreement of Grupo Bal, owner of the world’s largest silver producer Fresnillo Plc and base metals miner Penoles. Gurpo Bal also owns a pension fund and retail assets in Mexico.
AES operates three existing power plants in Mexico with total generation of about 1,055 megawatts. These include a plant that has supplied Penoles with electricity for several years.
In February, Grupo Bal announced the creation of oil exploration and production subsidiary Petrobal.
The unit aims to take advantage of Mexico’s historic energy sector opening finalized last year. The reform allows private companies to produce oil for the first time in decades and completely opens the power sector to private investment.
Grupo Bal is owned by billionaire Alberto Bailleres, one of Mexico’s richest men.
The remainder of the joint venture’s five-year investment is likely to be spent on projects focused on liquefied natural gas, water desalination and energy storage, an area where AES is already a global leader, said Rubiolo.
AES Chief Executive Andres Gluski first announced the joint venture in a second-quarter earnings call with analysts on Monday, noting that over the next decade Mexico will need 25 gigawatts of new or replacement generation.
However, he gave no details on the scope of the plans.
Rubiolo said the AES-Grupo Bal tie-up will pay close attention to upcoming auctions by CENACE, Mexico’s new independent grid operator, in which bidding terms on new power generation projects are expected in October.
“We will play an active role in the auctions,” he said, adding that “this alliance in particular is designed to be aggressive and a heavyweight in this market.”
(Reporting by David Alire Garcia; Editing by David Gregorio)
more recommended stories
Beautiful Costa Mujeres needs to be at the top of your travel bucket list
For many, a Mexican getaway consists.
Despite safety and security concerns, Cancun remains # 1 tourist destination in Latinamerica
Cancun maintained its position as the.
600 new police for Cancun, Playa del Carmen and Tulum Quintana Roo
According to riviera-maya-news.com, approximately 600 new.
Teen jogger who accidentally crossed U.S. border from Canada is detained for two weeks
A teenager out for a beachside.
Grand Finale of the 2018 Merida Initiative National Mock Trial Competition for Mexican Law Students
Mexico City, 21 June, 2018 –.
Three time NBA Champion Klay Thompson charters plane to Mexico full of IG models
Three-time champion Klay Thompson is in.
Mexico’s soccer national team mental coach is transforming mindsets nationwide
Though the spotlight is always on.
Maya sacred book “Chilam Balam Tekax” astrological predictions analyzed by INAH experts
The first specialized integral study of.
Prisma Hotel Group announces investment of 357 million for remodeling hotels nationwide
With the objective of always providing.
Trump’s ‘Tent Cities’: where unaccompanied minors are kept in South Texas
According to Esquire: Beyond the moral and.