IDB Invest, a member of the Inter-American Development Bank Group (IDB), provides a financing package of $17.2 million for the construction and maintenance of the Xoxocotla solar photovoltaic plant, which has a capacity of 70MWAC and is located in the municipality of Ayala, in the state of Morelos, in Mexico. The project is developed by X-Elio, a leading global company specialized in the development, operation and maintenance of photovoltaic solar energy projects.
The photovoltaic plant is a competitive energy source and will increase the installed capacity of unconventional renewable energy, while diversifying the country’s energy matrix and contributing to Mexico’s economic growth. The project will displace the equivalent of 1.6 million tons of carbon dioxide over the next 20 years. A report by Go Eco Green21 states that IDB Invest led the financial package consisting of the combination of three loans: an IDB Invest loan of $17.2 million, which includes $9.3 million of its own funds, plus the mobilization of $4.6 million from the China Fund for the Co-financing of the Americas and $3.3 million of blended financing from the Canadian Climate Fund (C2F). In addition, a second loan of $13.9 million from the Institute of Official Credit (ICO) and a third loan of $8.3 million from the Bank of Tokyo (MUFG Bank Ltd).
The Xoxocotla project was awarded in the second long-term auction called by the National Energy Control Center of Mexico (CENACE). Currently, it has signed a Power Purchase Agreement (PPA) for three products: 15 years for the sale of energy and the generated power and 20 years for clean energy certificates.
The operation potentially contributes to five of the United Nations Sustainable Development Goals: Affordable and Clean Energy (SDG 7), Decent Work and Economic Growth (SDG 8), Industry, Innovation and Infrastructure (SDG 9), Climate Action (SDG 13) and Partnerships for the Goals (SDG 17).
The project is part of the deals closed in accordance with the Mexican Electricity Industry Law, effective since August 2014, which establishes a restructuring of the country’s energy industry. The goal is to generate 35 percent of Mexico’s electricity through clean energy by 2024, while lowering costs and tariffs, reducing the carbon footprint, and promoting private sector participation and transparency in the sector.
IDB Invest’s participation strengthens the regulatory framework and fosters the mobilization of capital, favoring the inclusion of the private sector in the deal. In addition, IDB Invest reinforces the sustainability of the project by promoting the adoption of high environmental and social standards.
About IDB Invest
IDB Invest, a member of the Inter-American Development Bank Group (IDB), is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social and environmental development in the region. With a portfolio of $12.4 billion in asset management and 342 clients in 24 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.
X-ELIO is a company specialized in the development, construction and operation of solar plants, with presence in the United States, Japan, Latin America (Mexico and Chile, among others), Australia, Southeast Asia, Italy and Spain. In 2018, it generated volume revenues of more than 130 million euros. The company has accumulated experience in the construction of solar plants for more than 3GW and currently has 21 operational photovoltaic plants and 7 under construction. The group is a world leader in renewable and sustainable energy, with a strong commitment to reducing greenhouse gases and combating climate change.