Kepco completes deal to supply electricity in Mexico

Korea Electric Power Corporation announced yesterday that it sealed a deal with Mexico’s Federal Electricity Commission to supply electricity in the North American country for 25 years beginning in 2013.

A Kepco-led consortium will start building the 433 megawatt capacity Norte II Combined Cycle Power Plant in 2011.

The project is expected to make Kepco profits of $230 million.

“The Kepco consortium’s recent win will expedite our competition in the Mexican independent power producer market, which had been dominated by Japanese and Spanish companies,” said Byun Jun-yeon, vice president of Kepco.

Byun added that Kepco will vie for nuclear power projects in the Mexican market.

Kepco announced on Aug. 4 that its consortium was selected as the preferred bidder for the Norte II CCPP’s construction and operation in Chihuahua, northern Mexico. Its partners include Samsung Engineering and Techint of Mexico.

The power plant’s construction will be led by Samsung Engineering and is expected to be completed by May 2013.

While the exact amount of the recent deal has not been revealed, Kepco said in August that the total cost of the project would add up to $420 million.

A new special-purpose company will be formed in the collaboration between Kepco, Samsung C&T Engineering and Construction Group, and Techint of Mexico. The company will be funded with the help of the Export-Import Bank of Korea and international commercial banks.

By Jung Seung-hyun [seungjung@joongang.co.kr]