Dutch asset manager PGGM has abandoned plans to join in the construction of a large wind farm in Mexico due to ongoing resistance from local communities.
It said it relinquished its rights to participate in the 396MW project as part of a consortium with Macquarie and Mitsubishi Corporation, adding that it would not take part in any other wind projects in Mexico.
Four years ago, PGGM took a 33.75% stake in the joint venture that would construct the €66m project of 132 turbines on the windy coast of Oaxaca state.
But the investment has proved too contentious, according to PGGM spokesman Maurice Wilbrink.
“It is now clear the project will remain controversial, and that it will no longer deliver the risk-adjusted returns we expected,” he said.
“Although the project has received official support from the local community and all the necessary permits have been obtained, [non-governmental organisations] kept fighting the plan in the courts, which blocked the start of construction.”
As a result, the planned wind farm had already been moved to another location, Wilbrink said.
He said the Mexican government had given the public the chance to comment on the windfarm plan, and had promised to build infrastructure and cultural centres in return for their approval.
The spokesman said he could not comment on PGGM’s position within the consortium, but he did confirm it would retain its stake in the joint venture for the time being.
He declined to specify the costs incurred for the failed project.
The power the wind farm was meant to generate was to be used by bottling plant Femsa and a Heineken brewery.
In 2012, PGGM said the planned wind park could operate without subsidy because of the relative high price of electricity.
Henk Huizing, PGGM’s head of infrastructure at the time, said: “Long-term purchase contracts would offer stable and inflation-linked cashflows, which excellently match our clients’ liabilities.”
PGGM is asset manager for the €172bn healthcare pension fund PFZW.