Northland Power has taken a final investment decision (FID) for the 130MW La Lucha solar project to be located in the State of Durango, Mexico.

Solar power plant

Image: Northland Power takes FID on 130MW Mexican solar project. Photo: Courtesy of haak78/

Northland Power has secured all the major permits needed for the La Lucha project, which will be built with an estimated cost of C$190m ($141.2m). Construction activities will begin shortly and the project is expected to be completed in the second half of next year.

The Canadian company plans to initially fund the La Luchasolar plant through a combination of cash and its corporate credit facility. Subsequently, it plans to use a non-recourse project financing for the solar plant, once offtake agreements are secured.

Northland Power development for Latin America managing director Javier Chavarria said: “The robust fundamentals of Mexico’s power markets give us the confidence to build La Lucha as our first attractive investment opportunity in the country.

“There is significant interest within the Mexican industrial sector to meet some of their energy needs through contracts linked to renewable power facilities like La Lucha.”

Recent reforms in the energy sector in Mexico have resulted in strong market fundamentals, creating a bilateral power generation and marketing opportunities, backed by the growing demand of power and renewable attributes from industries.

The company aims to negotiate bilateral power contracts with several local commercial and industrial offtakers in the market.

Northland president and CEO Mike Crawley said: “Today’s decision represents an exciting step in the evolution of Northland’s generation business with our first project focused on the commercial and industrial customer segment.

“La Lucha is the first investment opportunity to come out of our regional development offices located in Toronto, Houston, London, Seoul and soon, Tokyo. These offices are designed to put knowledgeable, local and experienced development teams on the ground in our identified growth markets.

“This also represents our first step towards moving closer to the end customer in select markets to drive more accretive growth.”

In February, the Canadian company signed a power purchase agreement with Taiwan Power Company (Taipower) for its Hai Long 2A offshore wind project, based on its 300MW feed-in-tariff (FIT) allocation.

Northland and its partner Yushan Energy own 60% and 40% stake in Hai Long 2A project, respectively. The PPA was entered for a 20-year period.