Image credits: X-Elio
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News Article

X-Elio Closes Financing for Perote II Solar Project

By Cas Biekmann | Wed, 07/28/2021 - 17:57

Spanish solar energy developer X-Elio has obtained the financing required for its Mexico-based Perote II project. The 119MW photovoltaic solar power plant needed an investment of US$44.1 million to ensure a successful construction, operation and management.

Perote II, located in the state of Veracruz, is expected to produce 248.370 MWh/year, enough to supply energy for 72.916 households. X-Elio furthermore calculates that the project will save 161.436 CO₂/Year of emissions over a timespan of around 35 years. The financing agreement is a loan signed with the International Finance Corporation (IFC) and Banco Sabadell.

In a 2020 interview with MBN, X-Elio’s Mexican Country Manager Armando Gomez outlined the company’s activities within the country “We have developed a deep understanding of the market and have invested in the country both monetarily and in portfolio capacity, adding up to 650MW spread across the territory,” he said.

Gomez said that the company’s Perote II project was X-Elio’s only solar project not stemming from the three long-term energy auctions. The fact that the company was able to close its financing despite the current regulatory uncertainty in the market can be considered as a substantial win. 

President López Obrador’s work to undo the liberalizations of his predecessor in order to bring back the state-owned companies to their former glory has been a problem for renewable energy developers. Other than the government’s oft-discussed measures, the issuing of necessary permits has stopped almost entirely. For many developers, this situation has been difficult to overcome, leading to many considering to search for better fortunes elsewhere.

But X-Elio, which has several projects still under development, does not want to have a negative outlook. “We need to find the right opportunities for the company and avoid falling into the mainstream of negativity regarding prospects due to the government’s shifting attitude toward the sector. We do not want to be among those who are looking to exit Mexico swiftly because the sector is in distress. On the contrary, we want to find opportunities to increase our investors’ returns,” said Gomez. “This could include growing or rotating our portfolio rather than finding pure exit plays. We need to be careful and not take the easiest way out and/or to forget what brought us here in the first place. We need to consider the opportunities for us to develop once again in the future, when the uncertainty cloud upon us dissipates.”

The data used in this article was sourced from:  
Forbes, Iberdrola
Photo by:   X-Elio
Cas Biekmann Cas Biekmann Journalist and Industry Analyst