Chapter 8

Merida III, Mexico

Introduction

The case studies in this Chapter and Chapters 7 and 9 examine five power projects in Mexico.
Please refer to the ‘Introduction’ in Chapter 7 for a brief overview of the projects.

Project summary^1

Merida III, Mexico’s first true IPP venture, is a 440 MW electric power plant in the city of
Merida on the Yucatan peninsula. The plant is powered by a Westinghouse 501F gas turbine.

Background

Power demand in Mexico

As of 1994 Mexico had about 27,000 MW in its electricity grid. Power needs were expected

Type of project

Power plant.

Country

Mexico.

Distinctive features

This was the first venture by an independent power producer (IPP) in Mexico.

Description of financing

The total project cost of US$231 million was financed in 1998 as follows:

• US$58 million sponsors’ equity;


• US$104 million A loan from the International Finance Corporation, with 20-year
  maturity and mortgage-style repayments priced at 225 basis points (bps) over the
  London interbank offered rate (Libor); and


• US$74 million IFC B loan, with 16.5-year maturity and mortgage-style repayments
  priced at 135 bps over Libor.