Tamazunchale Power Plant

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The Mexican government, under the Federal Electricity Commission (FEC), awarded a greenfield contract to build, own, and operate an electricity generation plant in Mexico’s San Luis Potosi state. The Tamazunchale project was to use natural gas to generate power, and this power was to be supplied to FEC (and on to consumers) through a 25-year contract. The contract was awarded separate from other energy programs; and was the largest contract granted for independent power production (IPP) in Mexico’s history. The power purchase agreement was awarded by CFE in July 2004. Iberdrola SA won the competitive bid by offering a fixed generation price of US$0.09 per kWH. The contract was awarded to Spanish firm Iberdrola SA who will operate the plant through its Mexican subsidiary. The total project cost was US$500 million. Iberdrola financed the initial phase of the construction with its own resources and secured project financing in December 2006. Construction of the 1,135 MW gas-fired combined-cycle plant was expected to commence in early 2005 and became operational in June 2007. Contract termination date set for expected construction completion date (2007) plus 25 year PPA.