CIP targets Mexico's renewable energy boom

Green investment powerhouse Copenhagen Infrastructure Partners (CIP) will enter projects in Mexico’s latest renewable energy call and is talking to developers across the country about participating in the process.

“We have a portfolio of projects and we would like to register some of them in the new call,” Peter Halmø, managing director at CIP’s Global Market Fund investment team, told BNamericas.

“A lot of developers have reached out to ask us if we can get involved because they may not have the capital or the competences to participate by themselves.”

On May 11, the energy ministry published its second call for renewable energy projects that align with its binding planning.

In the ministry’s first call, which concluded at the end of 2025, CIP was awarded fast-track generation permits for two solar and battery projects in Campeche state on the Yucatán peninsula.

While CIP did not enter projects this year in the ministry’s request for proposals using the mixed scheme, a form of joint venture with state-owned utility CFE, the fund is not ruling out future involvement.

“It is not the standard ownership structure that we are used to operating under,” Halmø said. “But we are open to being flexible and to entertaining different structures as long as the risk/return is right.”

On Friday, the energy ministry published another call for generation and storage projects in association with CFE.

PPAs and storage

CIP expects to start construction at its two Yucatán projects in the summer. The all-in cost will be US$1.5 billion (bn), including capex and financing costs.

CIP is in discussions with commercial banks from France, Spain and the US and says the financing is oversubscribed.

“There is a lot of interest in good projects in Mexico, especially with a strong sponsor like CIP,” Halmø said. “Fundamentally Mexico is a very attractive market which has been underserved in terms of investment in energy.”

The two projects, La Esperanza Solar and La Alegría Solar, will deliver a total of 900MW of solar and 450MW of storage capacity.

In April, CIP signed power purchase agreements (PPAs) for the projects with CFE.

The structure of the two PPAs is similar to the contract that CFE is offering potential investment partners in the mixed scheme, Halmø said. Under the mixed scheme, CFE will buy up to 70% of the power generated.

“We will have some merchant volume,” Halmø said. “When the project fundamentally makes sense, we are willing to take some merchant risk. The business case is based on the PPA revenue, but the merchant volumes could provide good upside.”

CIP will install batteries with the ability to discharge for five hours and with about half the output of the solar power plants.

That is a longer discharge duration than the three hours required by the storage regulations issued in April, and more storage capacity than the 30% level required by the latest call.

“We are comfortable with the new regulations,” Halmø said. “We believe that we will achieve a very attractive risk-adjusted return.”

“Battery storage was a key enabler of our PPA with CFE. Thanks to batteries, we can sell capacity to the offtaker.”

BNamericas will publish the full interview with Peter Halmø later this week.

(The original version of this content was written in English)