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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 28434 |
| Company name | Eurus S.A.P.I. de C.V. |
| Country |
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| Sector | Wind Power - Renewable Energy Generation |
| Environmental category | A |
| Department | Reg Ind, Infra & Nat Res, CAF/CLA |
| Status | Active |
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| Date SPI disclosed | December 18, 2009 |
| Projected board date | February 18, 2010 |
| Previous Events | Invested: June 28, 2010
Signed: June 2, 2010
Approved: February 25, 2010 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
Eurus SAPI de CV (“Eurus” or the “Company”) is a special purpose vehicle incorporated in 2006 under Mexican law for the development, construction and operation of a 250.5 MW wind farm and associated transmission assets in the La Venta Ejido, Juchitán de Zaragoza Municipality of the State of Oaxaca, Mexico (the “Project”). The Project will utilize 167 1.5 MW AW70 Class I turbines manufactured by Acciona Windpower (“AWP”), and benefits from an exceptional wind resource with high average wind speeds matched by few locations in the world. Project construction is well advanced; to date, all 167 turbines had been erected, of which 110 (165 MW or 66%) have been connected to the grid and declared operational. The substation and related transmission assets are complete.
Eurus is 94% owned by Acciona Energía México S. de R.L. de CV (“AEM”), itself a wholly owned subsidiary of Acciona Energía S.A. of Spain (“AE” or the “Sponsor”). The Project is being developed under Mexico’s autoabastecimiento, or autogeneration, framework. As such, the remaining 6% shareholding in the Company is owned directly and indirectly by Cemex México SA de CV (“Cemex México”), who is supplying itself with the Project’s output pursuant to a 20-year power purchase agreement (“PPA”) with the Company. Cemex México originally initiated development of the Project for a source of clean, low cost, fixed price energy, and selected AE to take over ownership and development of the Project in 2006. |
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| Project sponsor and major shareholders of project company |
The Project’s Sponsor AE is part of the Energy Division of Acciona, a leader in renewable energy and the world’s largest developer and constructor of wind farms, with over 7,291 MW of wind capacity installed in fourteen countries. It is owned by engineering, construction and infrastructure conglomerate Acciona S.A. (“Acciona”) of Spain.
The off-taker and shareholder Cemex México is a wholly owned subsidiary of Cemex S.A.B. de C.V. (“Cemex”), a Mexican company primarily engaged, through its operating subsidiaries, in the production, distribution, marketing and sale of cement, ready-mix concrete, aggregates and clinker throughout the world. Cemex México accounts for a substantial portion of Cemex’s operations. |
| Total project cost and amount and nature of IFC's investment |
| Total Project costs are estimated at US$536 million for construction of the wind farm and related transmission assets. IFC proposes to investment up to US$55 million in senior debt for IFC’s own account, and approximately US$20 million in subordinated debt. Additional debt facilities for the Project will be provided by IFC, the Inter-American Development Bank (IADB), and other lenders. |
| Location of project and description of site |
| The Project is located in the State of Oaxaca, in the Isthmus of Tehuantepec approximately 10km north of Union Hidalgo, about 1km south of the La Venta municipality (the closest population), which communally owns the land in which the Project site is located. The Company has entered into 30-year land lease agreements with the community. The Project site comprises farmland and sparse tree lines along roads, fields and several small streams, and its design has taken into account ongoing farming activities and limited disruption on existing environmental features. As such, it is expected that there will not be a large change in land use. |
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| Anticipated development impact of the project |
Demonstration effect: Despite the fact that the State of Oaxaca houses one of the best wind resources in the world, up through 2008, Mexico had only 88 MW of installed and operational wind projects (not including those under construction). The successful commercial financing of an additional 250 MW of wind capacity of the Eurus project will send a market signal to global windpower developers that the Mexican windpower market is viable and ready for scale-up, thereby helping to accelerate development of windpower potential in the State of Oaxaca.
Decreased emissions leading to improved local air quality and climate change mitigation: The Project will displace fossil-fuel generation. This will help reduce local air pollutants (SOx and NOx) and improve air quality for the local population. It will also contribute to Mexico’s climate change abatement efforts by displacing an expected 600,000 tCO2e per year.
Job creation/community development. The local community, La Venta, who collectively owns the land surrounding the Project, will benefit through (i) significant sourcing of labor from local communities during the construction period, and overall job creation during the construction and operation period; (ii) community development programs undertaken at the Company’s initiative; and (iii) direct payments from the Company to community member for use of land. |
| IFC's expected development contribution |
Countercyclical role: Under current financial market conditions, IFC’s countercyclical financial support is critical in helping to provide and mobilize financial resources to complete the financial plan. If IFC were not to be involved, it would be unlikely that the Company would obtain financing in the amounts and tenors that the Project requires.
Ensure IFC’s environmental and social standards: Based on preliminary review, the Company appears to have adhered to Mexican regulation in relation to environmental and social standards. IFC’s participation in the financing will enforce higher standards, in particular in the area of bird mortality and community consultation/disclosure. |
| Environmental and social issues - Category A |
The Project has been classified as Category A according to IFC’s Environmental and Social Review Procedure (and as an A by IADB with whom IFC is coordinating project review), primarily because of potential avian impacts and the large number of land leases involving communally owned lands (Ejido).
While a Government approved EIA completed in 2006 exists, additional studies were required to meet the IFC and IADB institutional requirements, particularly as relates to avian impacts, EMS development, land negotiations, public consultation and social impacts. The Company has completed these additional studies and developed management plans to address these issues. To further address avian impacts, there will be additional assessment by international consultants for both EDF La Ventosa and Eurus. Avian impacts are not expected to be significant, and the projects will establish a monitoring and shutdown system to minimize risks. |
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| For inquiries about the project, contact: |
Miguel Angel Alonso Rubio
Paseo de Tamarindos No. 90
México, D.F.
Telephone: 5255 52911111
Fax: 5255 52919948
malonsorubio@acciona.com
www.acciona.com |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
| Local access of project documentation |
Carretera Juchitán-Tehuantepec No. 3
Col. Centro, Altos del Hotel Santo Domingo
Juchitán de Zaragoza, Oaxaca, C.P. 70000
Telephone: 019712810749 |
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