Marathon Capital Announces the Successful Equity Capital Raise and Project Financing of Mexico Power Group’s La Bufa 1 Wind Farm
Marathon Capital (“Marathon”) is pleased to announce the successful equity capital raise and project financing of Mexico Power Group’s (“MPG”) 130 MW MPG La Bufa 1 Wind Farm in Zacatecas, Mexico. MPG, a spin-off of Cannon Power Group (“Cannon”), based in Tijuana, Baja California, is an independent company whose directors have been leaders in the renewable energy industry since its formation. Its focus is on the development, operations, and maintenance of wind and solar energy projects. The MPG team has produced over 25 wind projects, installing approximately 5,500MWs worldwide.The MPG La Bufa 1 Wind Farm has a 20-year landmark power purchase agreement with Volkswagen de Mexico (“VW Mexico”). When fully built, the wind farm will supply over 60% of the power required by VW Mexico’s plant in Puebla, one of the largest automotive assembly plants in the world, and will help this company prevent the emission of over 140,000 tons of CO2 into the atmosphere annually.
Marathon led a comprehensive market search to find a well suited equity partner to MPG, around an investment structure framework which sought to enable MPG to maintain control of its development pipeline, while monetizing its construction-ready projects. This process culminated in the selection of First Reserve, the global private equity and infrastructure investment firm exclusively focused on energy, whose philosophy and approach to renewable energy investing proved to be an excellent fit for all parties involved. First Reserve’s equity investment in La Bufa 1 will be the inaugural investment into this long-term partnership.
Marathon has also acted as exclusive Financial Advisor to MPG in the Project Financing transaction. Sumitomo Mitsui Banking Corporation (“SMBC”) led a consortium formed with Nacional Financiera S.N.C. (“NAFIN”), and Korea Development Bank (“KDB”) to provide the construction and term debt, while Banco Nacional de Comercio Exterior S.N.C. (“Bancomext”) is providing the value-added tax (“VAT”) and subordinated letter of credit facilities.”The financing of MPG La Bufa 1 marks a tremendous milestone for our company, team and local community. We are excited to join forces with our new partner, First Reserve, to provide clean energy to Volkswagen Mexico, while contributing to the development of the Zacatecas region, generating economic benefits and employment opportunities,” said Gerald Monkhouse, Chairman of Mexico Power Group. “MPG is extremely pleased with the Marathon-led process, which helped us achieve this remarkable goal”.
“Marathon Capital worked closely with the MPG team, helping them select the ideal equity partner and navigate through the complex process of project financing. It has been a pleasure to work with the MPG team and we look forward to continuing an ongoing relationship,” said Thiago Alfaia, Director of Marathon Capital, who led the execution of these mandates for Marathon.”First Reserve is excited to partner with Mexico Power Group, a pioneering renewable energy company, and to help Mexico and Volkswagen achieve their renewable power targets. Upon completion, the La Bufa project also is expected to increase our portfolio of wind generation in Mexico to approximately 400 MW. We were pleased to work with Marathon Capital to reach what we believe will be a successful outcome for all parties involved, as well as our investors,” said Adi Blum, Director of First Reserve.