The Norte III combined cycle gas plant in northern Mexico faced a series of critical challenges, without certainty of funding to completion.
Ciudad Juarez is a strategically-located, industrial city in northern Mexico. It has historically enjoyed strong growth but economic activity has been impeded by flow-on effects from the global financial crisis and cartel-related violence.
In recent years, the city undertook a rebuilding program and the Mexican government identified the construction of the Norte III combined cycle gas plant in Juarez as one of the principal projects in a five-year infrastructure plan to modernise existing infrastructure and strengthen key regions across Mexico.
Mexico’s national power company, the Federal Electricity Commission (CFE), solicited bids for the development of the plant in 2014, and the project was finally awarded in March 2015 to a renowned energy company who secured a bridge loan for a portion of the total plant’s cost and started building it. However, after a series of critical challenges and lack of funding, the project stalled. By 2017, the viability of the project was in question and the CFE and bridge lenders were seeking new alternatives to restart the plant’s development and construction.
A Macquarie-led consortium injected vital funds and financial expertise to restart construction.
Macquarie Capital assembled a consortium with Argentinian engineering and construction firm Techint, bringing together a complementary set of financial and technical expertise.
After highly complicated due diligence, contract negotiations, structuring and technical planning, the consortium restructured the project, secured $US716 million in financing from 10 top tier global lenders to restart the construction of CFE’s flagship CCGT, and secured a 25-year fixed-price O&M with General Electric for the operational phase.
Both Macquarie and Techint committed their own equity alongside the new financing.
As a result of these efforts, construction resumed and more than 500 employees were back on site within 90 days.