) announced that its Mexican unit Infraestructura Energetica Nova
SAB ("IEnova") has received a loan worth $270 million. The company
will utilize the fund for the completion of the first phase of its
wind energy generation project called Energia Sierra Juarez (ESJ).
In addition, the company received $35 million for taxes. The loan
has to be repaid over 18 years.
IEnova is engaged in the construction and operation of energy
infrastructure in Mexico. It is the only energy company in the
country, which is publicly traded. The company has two segments -
Gas and Electricity. In 2013, IEnova invested $2.4 billion in
natural gas distribution, transportation and storage and
electricity generation projects. Currently, the company is spending
around $1.8 billion in new energy infrastructure ventures.
The 155-megawatts (MW) ESJ wind project is located in the
Municipality of Tecate, Baja California, Mexico. The $300 million
project is jointly owned by IEnova and InterGen. It is the first
cross-border wind generation project between the U.S. and Mexico.
The company has used 47 units of 3.3-MW Vestas turbines in the
project, which is expected to start commercial operations in the
first half of 2015.
The output from the ESJ project will be purchased by Sempra
Energy's subsidiary San Diego Gas and Electric Company under a
20-year power purchase agreement. Inking long-term contracts will
ensure IEnova a steady cash inflow, which will support it to repay
its loan on time.
Sempra Energy continues to expand its renewable portfolio though
disciplined capital investment program. The company has completed
several projects or is under construction phase, including 75-MW
Broken Bow 2 wind farm, 150-MW Copper Mountain Solar 2 plant and
150-MW Mesquite Solar 1 plant. Sempra Energy has inked a deal with
Consolidated Edison, Inc.
) to sale 50% of Copper Mountain Solar 3 facility.
Sempra Energy's peers including
DTE Energy Company
NRG Energy, Inc.
) are also investing considerably to extend their renewable
generation mix through organic and inorganic growth projects.
Recently, the Obama administration rolled out its plan to curb
carbon emissions from power plants by 30% by 2030 from 2005 levels.
The rule will probably come into effect next year.
We believe that Sempra Energy's focus on strengthening its power
generation capacity through renewable sources will enable it to
comply with stringent regulations.
Sempra Energy currently has a Zacks Rank #3 (Hold).
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