abengoa cogeneration electric power plantU.S.-based power company AES Corp and Mexico’s Grupo Bal announced this week that together the two companies will invest up to $2.5 billion over the next five years in Mexico’s electric power industry.

The 50/50 joint venture with Grupo Bal and AES will direct the majority of the investments towards electricity generation from both conventional and renewable sources, including wind and solar power.

“In terms of scale, the idea is to grow our portfolio in the next five years at least by 2 gigawatts with estimated investment of between $2 billion and $2.5 billion,” said Juan Ignacio Rubiolo, head of AES’s Mexican unit in an interview with Reuters.

AES will operate the power plants that the partnership builds. All new projects will require the agreement of Grupo Bal, owner of the world’s largest silver producer Fresnillo Plc and base metals miner Penoles.

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AES operates three existing power plants in Mexico with total generation of about 1,055 megawatts. These include a plant that has supplied Penoles with electricity for several years.

In February, Grupo Bal announced the creation of oil exploration and production subsidiary Petrobal.

The remainder of the joint venture’s five-year investment is likely to be spent on projects focused on liquefied natural gas, water desalination and energy storage, an area where AES is already a global leader, said Rubiolo.

Source: El Finaciero and AES Earnings Call