General Electric, Latin America

Samalayuca II project receives final clearance

Issue 4 and Volume 4.

Samalayuca II project receives final clearance

By Ann Chambers

Final documents have been signed for the (US)$647 million Samalayuca II power project, and construction is beginning. The 700-MW plant will be the first large privately funded power project in Mexico and is expected to set a precedent for future infrastructure projects. No Mexican government guarantees will be provided for the combined-cycle plant, which is expected to enter commercial service in the fall of 1998.

The Samalayuca II consortium includes GE Power Systems and GE Capital Services, El Paso Energy International, International Generating Company Ltd. (InterGen) and EMICA of Mexico City.

Debt financing consists of loans from the Export-Import Bank of the US, the Inter-American Development Bank and a commercial bank group. Equity investment will be approximately (US)$132 million, with GE Capital providing 40 percent; El Paso, 20 percent; InterGen, 20 percent; and EMICA, 20 percent.

The plant will be sited adjacent to the existing Samalayuca I power plant in northern Mexico. After completion, the power plant will be operated by the Comision Federal de Electricidad (CFE), the Mexican state utility, under a 20-year lease, with ownership then transferred to CFE.

Primary fuel will be natural gas. El Paso Energy Corp. plans to construct a new lateral pipeline to the US/Mexican border to deliver natural gas from the US to the Samalayuca site.

Ann Chambers is the Associate Editor of Industry News.