Mexico weighs $4.6 billion financing vehicle for renewable energy, storage projects

Mexico’s Secretariat of Finance and Public Credit (SHCP) and state development bank Banobras are considering the creation of a financing vehicle worth up to MXN 80 billion to support renewable energy and energy storage projects awarded to private companies partnering with state-owned utility CFE.

According to Bloomberg, the proposed financing mechanism would support around 30 renewable energy and storage projects awarded to 18 private companies, with most of the developments consisting of solar power plants.

The proposal calls for a single financing vehicle capable of channeling capital to multiple projects. The structure could combine public funding, bank loans, Mexican pension funds, and investments from other institutional investors.

Banobras Chief Executive Jorge Mendoza told Bloomberg that authorities are in discussions with banks and investors to secure the funding. Most of the financing is expected to be arranged over the next 12 months, with a significant portion targeted before the end of 2026.

Using a common financing vehicle could reduce financing costs and accelerate due diligence by allowing lenders to build on the technical and financial assessments already completed by the government during project selection.

Banobras is also considering offering more favorable financing terms to developers that use machinery, components, and other equipment manufactured in Mexico, with the aim of increasing domestic content and strengthening local supply chains.

The mechanism would support Mexico’s public-private partnership program for renewable energy and energy storage projects following strong interest in the government’s first procurement round. Authorities plan to launch additional tenders for renewable generation and battery energy storage projects.

From pv magazine Mexico