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Not a breeze
29 July 2011
Development banks and government incentives have propelled Brazil and Mexico to the forefront of Latin American wind project financing. The rest of the region is a long way from catching up. By Edward Russell.
Government incentive packages have spurred Mexico and Brazil to dominate Latin American wind project financing. Projects throughout the rest of the region are scattered and largely one-offs. For most of Latin America, that is not likely to change any time soon. Especially given the amount of time it took for a renewables market to emerge in the two leaders.
The stars aligned that made the [Mexican] government officials get behind renewables, says one Mexico City-based lender who has worked on various wind financings. The country passed the Renewable Energy Usage and Energy Transition Financing Act in November 2008, which made it easier to develop renewable self-supply projects, where a private entity is the offtaker of, and owner of a nominal equity stake in, generators. It further enhanced the competitiveness of wind power against other sources of electricity, with a 70% reduction in the wheeling tariff in April 2010. The country...
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