Risen Energy Co expects to invest $600 million on the building of a new 300 megawatt solar photovoltaic power plant in the Mexican state of Durango.
The area is considered to be the world’s strongest source of solar irradiation, or the measure of how much solar power is being produced in a location.
According to China’s Ministry of Commerce, by the end of last year the entire investment between the two countries had amounted to $610 million.
Risen was given the official go-ahead on the deal by Ningbo Foreign Trade and Economic Cooperation Bureau.
Yuan Jianping, the company’s marketing director, said discussions started with Durango officials in 2011 and both sides have now signed letters of intent on the project. The company has already opened a Mexican branch to manage the plant’s construction.
Yuan said building will start within two months of the final contract being signed, and if all goes as planned the plant will be finished by the middle of next year and operational by the end of 2017.
“The company is confident about the outlook for the Mexican PV market,” said Yuan.
“The state of Durango is the strongest solar irradiation source in the world, with an average of seven hours per day. The state’s government is very supportive toward the project.”
Yuan said that Mexico will be the first stage in the company’s Latin American expansion strategy, highlighting Chile as the next likely market.
Michael Barker, senior analyst at NPD Solarbuzz, said the solar energy and photovoltaic sector is rapidly becoming the preferred energy source for Latin American and Caribbean countries.
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“The region has high electricity prices and it also benefits from strong solar irradiation, which makes it a good candidate for solar PV deployment.
“As a result, experienced global solar PV developers are seeing strong growth potential in the region,” he said.
President Xi Jinping’s visit to Mexico on June is expected to spark increased investment activity between the two countries.
Mexican business newsite Mexican Business Web quoted the country’s Secretary of Economy Ildefonso Guajardo as saying last week that Mexico is looking forward to establishing a firm business relationship with China, and hopes Chinese companies will become one of its leading sources of inward investment.