ENGIE and Tokyo Gas to establish renewables joint-venture company in Mexico

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ENGIE and Tokyo Gas Co Ltd announced their intention to invest in Heolios EnTG, a 50/50 joint-venture company to develop renewable energy projects in Mexico. Heolios EnTG follows the successful and long-lasting relationship between Tokyo Gas and ENGIE which dates back to 1983. Heolios EnTG will develop, finance, construct, own, operate and maintain six renewable energy projects in Mexico. Two of the plants are onshore wind while the remaining four are solar photovoltaic, totaling 898.7 MW, enough to power 1.3 million Mexican households. The joint-venture received approval from Mexico’s federal competition commission, COFECE, on March 28, 2019. The projects were granted 15-year power purchase agreements through Mexican power auctions.

Image Source: ENGIE

One of the power plants, Tres Mesas 3, is a 50 MW wind power facility that entered into commercial operation in March 2019, ahead of schedule. The remaining plants are currently in various stages of construction and will start commercial operation in 2019 and 2020.

Mexico is endowed with extraordinary solar and wind resources. Aware of this potential, the Mexican government issued an energy law in 2015 transitioning the country to a low-carbon growth model targeting 35% of clean energy sources by 2024. Through Heolios EnTG, Tokyo Gas and ENGIE will support Mexico’s clean energy ambitions and boost the development of their renewable energy business in the country.

Mr Pierre Chareyre, Executive Vice President of ENGIE in charge of Latin America Business Unit said that “We are delighted to further consolidate the relationship of mutual trust between our teams and those of Tokyo Gas with the creation of Heolios EnTG. This joint-venture will combine our complementary areas of expertise and will enable ENGIE to continue to grow in a key area, the development of renewables in Mexico with Tokyo Gas. This move is fully aligned with ENGIE’s strategic roadmap presented during our Capital Market Day on February 28th, for which ENGIE plans to add 9GW of renewables to its generation portfolio by 2021. The partnership scheme implemented with Tokyo Gas also highlights ENGIE’s commitment to dynamic capital allocation through sell-downs and new investments. Heolios EnTG will also enable ENGIE to actively support Mexico in achieving its national renewable targets and to decarbonize its energy sources.”

Mr Kunio Nohata, member of the Board, Senior Managing Executive Officer, Chief Executive of Global Business Division of Tokyo Gas said that “We are very pleased to have this opportunity to actively participate in the Mexican renewable market together with ENGIE, now a world leading company in the renewable sector, with whom we have a longstanding relationship. We strongly believe Heolios EnTG would bring prosperity to both ENGIE and Tokyo Gas. This is a landmark achievement for us as this is the first renewable project joint-venture that Tokyo Gas will participate in outside Japan. This has definitely built momentum propelling us closer to reach our corporate target of ‘Vision 2020’”.