Blackstone’s Fisterra Energy announced the financial closing for the Tierra Mojada combined-cycle gas turbine (CCGT) power plant in Guadalajara, Mexico. The power plant will sell exclusively into the new wholesale electricity market created by Mexico’s energy reform. 

(Business Wire) Fisterra Energy, a company majority owned by Blackstone’s (NYSE: BX) energy-focused private equity fund, Blackstone Energy Partners, and global private equity fund, Blackstone Capital Partners, today announced it has achieved a financial closing for the Tierra Mojada combined-cycle gas turbine (CCGT) power plant in Guadalajara, Mexico. Tierra Mojada is a greenfield CCGT power plant that will sell exclusively into the new wholesale electricity market created by Mexico’s energy reform.

Tierra Mojada is a state-of-the-art, 875-megawatt (MW) combined-cycle natural gas-fired power plant utilizing GE’s highly efficient H-Class turbines. The majority of Tierra Mojada’s capacity will be sold under a long-term, 20-year Power Purchase Agreement (PPA) with Comisión Federal de Electricidad Calificados, the qualified supplier of Mexico’s national utility.

“This initiative would not be possible without the support of the Mexican government and CFE’s forward-thinking approach to Mexico’s power markets. The competitive wholesale power market in Mexico has incentivized new and efficient power generation, which ultimately reduces the price of power for consumers,” said Sean Klimczak, Senior Managing Director at Blackstone.

“This is an important milestone in the development of the Mexican power market and we are delighted to be a part of this growth. Tierra Mojada will deliver lower priced and more reliable power to the residents and businesses in the region,” said Pedro Barriuso, Fisterra’s Chairman and CEO. Bilal Khan, Managing Director at Blackstone, added that “Guadalajara was a natural location for this project given that it is Mexico’s fourth largest metropolitan area with robust annual demand growth.”

Tierra Mojada was financed with approximately $600 million of construction facilities and letters of credit provided by six banks: Société Générale, Calyon, Natixis, Sumitomo Mitsui, Mizuho, and Intesa São Paolo. The project is expected to finalize construction by December 31, 2019.

Tierra Mojada marks Blackstone and Fisterra Energy’s third energy infrastructure project in Mexico. In 2014, Blackstone and Fisterra reached a financial close for Ventika, Mexico’s largest onshore wind farm upon completion and one of the largest wind farms in Latin America. In 2016, Blackstone and Fisterra began exporting power generation from Texas to Mexico from its Frontera facility, which was the first power plant in history to export power on a dedicated basis from the United States to Mexico.