Citibank (Tokyo Branch), Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (NEXI) have signed a debt package in support of gas turbine and power generation equipment exports to Mexico.

The borrower is Banco Nacional de Comercio Exterior (Bancomext), which is acting as trustee for the trust established by state-owned Comision Federal de Electricidad (CFE).

JBIC has signed a US$167 million buyer’s credit (export loan) agreement. The loan is co-financed with Citibank, bringing the total co-financing amount to US$278 million. NEXI will provide insurance on the Citibank portion.   

The loan is intended to provide the CFE group with the necessary funds to purchase power generation equipment, such as gas turbines manufactured by Mitsubishi Heavy Industries (MHI), through Mitsubishi Power Americas, and Mitsubishi Power de Mexico, wholly owned subsidiaries of MHI, in order to establish a natural gas-fired combined cycle power plant with a total generation capacity of approximately 956 megawatts in Salamanca, a city in the state of Guanajuato.

In a parallel transaction, JBIC has signed a US$93 million loan agreement with Bancomext to support a 467 MW gas-fired combined cycle power plant in San Luis Potosi. The loan is co-financed with Citibank (insured by NEXI), bringing the total co-financing amount to US$155 million. NEXI provides 100% political risk coverage and 95% credit risk.

The Mexican government has committed to reducing greenhouse gas (GHG) emissions by 35% by 2030 compared to the business-as-usual baseline, as part of its Nationally Determined Contributions (NDC) under the Paris agreement. The plants align with the government's policy of replacing high-carbon fuels with natural gas in high-efficiency power plants.

According to JBIC, the loan will support a Japanese company that is exporting the gas-fired combined cycle power generation equipment, thereby supporting energy transition in Mexico while contributing towards strengthening the international competitiveness of Japanese industries.