Mexico to tender $2.8bn for power plants and infrastructure

Mexico‘s national power company is to tender $2.8bn for power plant, infrastructure and gas pipeline projects.

The power company, Comisiàƒ³n Federal de Electricidad (CFE), announced this week that the contracts will be offered by the end of the year in a move to boost the nation’s economic growth, provide cheaper power through improved infrastructure and increase Mexico’s gas imports from the US.

Included in the tender will be two combined-cycle power plants, a power transmission project and two natural gas pipelines.

All of the projects will be built near the Mexico-US border, and all are expected to come online by 2017, CFE said.

The projects will include the 928 MW Norte III power plant near Ciudad Juarez (at a projected cost of $1 bn); the 714 MW Guayamas II power plant in Sonora state ($822m); the 432-km Huasteca-Monterrey transmission line with two substations ($257m); the 423-km Encino-La Laguna gas pipeline, which will transport gas from the US state of Texas to the Mexican states of Chihuahua and Durango ($650m), and the 23 km San Isidro-Samalayuca pipeline, which will carry gas from Texas to the Norte III plant ($50m).

Companies expected to bid for the contracts include France’s GDF Suez and Korea Electric Power Corporation (KEPCO) as well as US-based Sempra Energy’s Mexican subsidiary IEnova. Winning bids for all projects will be announced in the fourth quarter of this year, CFE said.

The announcement comes on the heels of Mexico’s vote to allow independent power producers to sell their power directly to users, rather than to CFE. The vote was part of the nation’s ongoing electricity market reform.

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