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Country: Mexico

La Pluma Solar Park

Plans for a solar farm in Mexico that is both owned by a local company and can sell electricity to the grid and industrial offtakers have been in the works for some years. Overcoming challenges posed by the Covid-19 pandemic, a new president removing financial incentives and a location change due to environmental constraints, the La Pluma Solar Park is now moving into the feasibility study stage.

Key Highlights

  • Technology Solar
  • Country Mexico
  • Business type Greenfield
  • 945k Finance mobilised (USD)
  • 18% Project IRR

‘’The project had several strengths that attracted the support of PFAN,’’ explains PFAN Advisor Patrick D’Addario. ‘’This included a good location for solar electricity generation, a very good engineering team, and a regulatory framework that makes it possible for a private generator of renewable energy to sell to private parties in industrial or commercial estates via the grid,’’ he says.

The offtaker in this case is a nearby industrial park where many individual companies are located, including vehicle manufacturers who are opening plants in Mexico due to tax benefits. The project will indirectly create jobs at the industrial park by supplying energy needed by such businesses.

This innovative arrangement for distributing the energy produced by the park also stands to be one of the project’s main benefits, he adds. “A solar farm that sells to private offtakers and distributes the electricity over the grid sounds simple, but they’re both big hurdles. It will be the first project of its kind in Mexico, and can provide a template for this happening elsewhere,” he says.

PFAN supported the project’s bid for funding for a feasibility study. This involved helping them to clarify the commitment of the offtaker and the solar park’s financial plan, which had been complicated by the fact that Mexico’s president had scrapped the previous administration’s renewable energy credit programme.

The solar farm had originally been planned as a 100MW project for a different site at Susupuato in the state of Michoacán. However, various environmental constraints, including the site’s proximity to the Monarch Butterfly Biosphere Reserve, a UNESCO World Heritage site, as well as issues to do with terrain, vegetation and a nearby river, made the original plan unbankable and not environmentally friendly, so the owner of Enermun proposed the new site in Coahuila.

The project is being developed by Tracy Mathieu, Vice President of Business Development at Partnership International (PI), a US-based consultancy undertaking the legal, financial, regulatory, environmental and technical aspects of the project on behalf of Enermun.

As a result of PFAN’s help, the project was granted funding to carry out both the feasibility study into the original project at Susupuato, and now the new site at Marte.