CHICAGO, IL – December 3, 2015 – Marathon Capital (“Marathon”) is pleased to announce the successful equity capital raise and project financing of Mexico Power Group’s (“MPG”) 130 MW MPG La Bufa 1 Wind Farm in Zacatecas, Mexico. MPG, a spin-off of Cannon Power Group (“Cannon”), based in Tijuana, Baja California, is an independent company whose directors have been leaders in the renewable energy industry since its formation. Its focus is on the development, operations, and maintenance of wind and solar energy projects. The MPG team has produced over 25 wind projects, installing approximately 5,500MWs worldwide.
The MPG La Bufa 1 Wind Farm has a 20-year landmark power purchase agreement with Volkswagen de México (“VW México”). When fully built, the wind farm will supply over 60% of the power required by VW México’s plant in Puebla, one of the largest automotive assembly plants in the world, and will help this company prevent the emission of over 140,000 tons of CO2 into the atmosphere annually.
Marathon led a comprehensive market search to find a well suited equity partner to MPG, around an investment structure framework which sought to enable MPG to maintain control of its development pipeline, while monetizing its construction-ready projects. This process culminated in the selection of First Reserve, the global private equity and infrastructure investment firm exclusively focused on energy, whose philosophy and approach to renewable energy investing proved to be an excellent fit for all parties involved. First Reserve’s equity investment in La Bufa 1 will be the inaugural investment into this long-term partnership.
Marathon has also acted as exclusive Financial Advisor to MPG in the Project Financing transaction. Sumitomo Mitsui Banking Corporation (“SMBC”) led a consortium formed with Nacional Financiera S.N.C. (“NAFIN”), and Korea Development Bank (“KDB”) to provide the construction and term debt, while Banco Nacional de Comercio Exterior S.N.C. (“Bancomext”) is providing the value-added tax (“VAT”) and subordinated letter of credit facilities.
“The financing of MPG La Bufa 1 marks a tremendous milestone for our company, team and local community. We are excited to join forces with our new partner, First Reserve, to provide clean energy to Volkswagen Mexico, while contributing to the development of the Zacatecas region, generating economic benefits and employment opportunities” said Gerald Monkhouse, Chairman of Mexico Power Group. “MPG is extremely pleased with the Marathon-led process, which helped us achieve this remarkable goal”.
“Marathon Capital worked closely with the MPG team, helping them select the ideal equity partner and navigate through the complex process of project financing. It has been a pleasure to work with the MPG team and we look forward to continuing an ongoing relationship,” said Thiago Alfaia, Director of Marathon Capital, who led the execution of these mandates for Marathon.
“First Reserve is excited to partner with Mexico Power Group, a pioneering renewable energy company, and to help Mexico and Volkswagen achieve their renewable power targets. Upon completion, the La Bufa project also is expected to increase our portfolio of wind generation in Mexico to approximately 400 MW. We were pleased to work with Marathon Capital to reach what we believe will be a successful outcome for all parties involved, as well as our investors,” said Adi Blum, Director of First Reserve.
About Marathon Capital
Marathon Capital is a leading financial advisory and investment banking firm focused on providing financial advice in the areas of M&A, capital raising of debt and equity, project finance, tax equity, financial restructuring, recapitalization, bankruptcy and workout situations in the global energy and infrastructure markets. Marathon Capital is a two-time recipient of the “Best Renewable Asset M&A Advisor” award in Power Finance & Risk’s Annual Power Finance Deals and Firms Awards (2013 & 2014). www.marathon-cap.com
About Mexico Power Group
Mexico Power Group is an independent company headquartered in Tijuana, Baja California and managed by leaders in the industry of renewable energy since 1979. MPG’s founders have established the path toward success in several parts of Mexico by developing, building, operating and maintaining wind and solar powered projects at a public service level. The result has been the production of abundant and economical energy consciousness of the environment. MPG was formed and is directed by a sharp and expert team of professionals who also have strong and solid financial backgrounds. The dedication of MPG to the industry of renewable energy has produced more than 25 projects, installing approximately 5,500 MWs worldwide.
About First Reserve
First Reserve is the largest global private equity and infrastructure investment firm exclusively focused on energy. With over 30 years of industry insight, investment expertise and operational excellence, the Firm has cultivated an enduring network of global relationships and raised approximately USD $31 billion of aggregate capital since inception. Putting these to work, First Reserve has completed more than 550 transactions (including platform investments and add-on acquisitions) on six continents. Its portfolio companies span the energy spectrum from upstream oil and gas to midstream and downstream, including resources, equipment and services and infrastructure. Visit www.firstreserve.com for more information.