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Vive Energía CEO: Securing Cost-Competitive Funding for Wind still a Challenge in Mexico

Mexico has made significant strides in developing and deploying renewables in recent years, but recent regulatory uncertainty has cast a pall over the sector and may start to weigh on the bankability of transactions. Bonds & Loans speaks with Benny Villareal, Chief Executive Officer at Vive Energía about the company’s corporate funding strategy.

Feb 15, 2019 // 4:13PM

Bonds & Loans: Can you give us a sense of the company’s key strategic focus areas over the next 6-12 months?

Benny Villareal: Vive Energía shall be concentrating on the operational Kick Off of the Dzilam Wind Project as well as initiation of construction of two additional wind projects located in Guanajuato and Yucatan. At the end of 2018, we have left two projects ‘ready to build’ going into the New Year. They will be our main focus over the coming year and we aim to finish 2019 with the projects at a more advanced stage.

Bonds & Loans: Between the cost side and revenue side of the business, what is the treasury more focused on at the moment and why?

Benny Villareal: Since our strategic partnership with Envision Energy International back in 2015, Vive Energía has assured a high-quality turbine at very competitive cost, hence our main concern lays with the revenue side of the business.

Bonds & Loans: What is the biggest constraint or challenge facing the Treasury department at the moment?

Benny Villareal: Our biggest challenge currently is securing competitive financing for the above-mentioned projects and doing so in an agile manner. This is important so that we align our financing with the growth expectations of the company. An additional challenge as we enter 2019 is waiting for the announcement of the new policies of the Comisión Federal de Electricidad (CFE) and how this will impact our nascent wind projects.

Bonds & Loans: Under AMLO’s administration, how do you see the implementation of the energy reforms developing?

Benny Villareal: There is definitely appetite in the market for the reforms to be continued with the new administration, and it is likely these will be pushed through by AMLO. Currently, there is some uncertainty because the government have yet to concretely announce their plans, but this will become clearer in the New Year. Long term projects that are already in the process of receiving financing will continue to do so in 2019. In the electricity sector, the question mark is more surrounding the financing of the medium-term projects. At this stage, it is difficult to say as it will depend on the announcements of the government.  

Benigno Villarreal del Rio heads “Vive Energia”, a Renewable Energy Development Company and Consulting Firm. He is credited for leading the teams responsible for the development, financing and ultimately the construction and commissioning of nearly 600 MW of Mexico´s currently installed Wind Generation capacity. Vive Energia and Envision Energy their strategic partners were awarded a 90 MW wind project in the first ever Mexican Electricity Open Market Tender process. For the last ten years Dr. Villarreal has been intensely cooperating with the Mexican Government and diverse nonprofit organizations in order to obtain the basic reforms that have created the necessary legal framework to better develop the renewable energy market in Mexico. He is also President of the Peninsular Association of Renewable Energies (APER), Organization of business representation of the industry in the Yucatan Peninsula.

CFO Insights Latin America Energy Projects & Infrastructure Americas Mexico

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