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Private Power Growing Fast in Mexico

Private Power Growing Fast in Mexico

InterGen and AEP Resources financially closed a deal on the 600 MW natural gas-fired Bajio power plant. The $435 million plant is under construction in the state of Guanajuato, 160 miles from Mexico City.

AEP Resources, a subsidiary of American Electric Power, and InterGen, a Shell-Bechtel venture, secured funding from a number of banks to ensure the joint venture would reach completion. InterGen was awarded the project in April 1999 and AEP Resources bought a 50% interest in the plant in December 1999

The Comison Federal de Electridad (CFE) will use about 495 MW of the plant's generation with the remaining 105 MW being sold to industrial customers. Construction should finish next year and the power generation facility should be fully operational in November 2001.

"Bajio is the third electrical infrastructure development we have successfully closed and brought into construction in Mexico," said Carlos Riva, CEO of InterGen. "Mexico is one of our top international markets and we plan on being an active participant in additional CFE bids over the next two years."

Don Clements, president of AEP Resources added, "We anticipate continued development work in Mexico and look forward to additional projects with our partner."

The Bajio plant is one of 10 power plants that the Mexican government has awarded since 1997. According to AEP, Mexico's Energy Secretary Luis Tellez said that demand is growing 7% a year, and Mexico must add 3,000 MW per year to keep up.

The CFE recently approved two permits to generate electricity under the self-supply modality to Energia de Veracruz and Energia Veracruz II. These project grants will allow Ispat - an Indian-based steel company - and its partners to generate up to 930 MW at an estimated cost of US $465 million. Ispat will build a 651 MW natural gas-fired plant in the state of Veracruz near the coastal city of Boca Del Rio. The second plant, also to be built by Ispat and its partners, will be a thermoelectric station capable of generating 279 MW. The two plants will use approximately 49.4 Bcf/d and are expected to be in service in 2003.

Alex Steis

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