UPDATE 1-Mexico's Cemex creates electricity unit to tap into energy reform
(Adds Pattern Development joint-venture, background on energy reform)
MEXICO CITY Feb 19 (Reuters) - Mexican cement-maker Cemex said on Thursday it has created an energy division to take advantage of Mexico's landmark energy reform, and launch power projects that could provide up to 5 percent of Mexico's electricity requirements within five years.
Cemex has struggled with a large debt load and cost-cutting since an ill-timed $16 billion takeover of Australian rival Rinker in 2007, when the U.S. housing market nosedived.
In recent years the company has been slashing costs and looking to sell assets to regain a coveted investment grade rating. Cemex executives are hopeful that Mexico's energy reform will be a lucrative new path for the giant cement-maker.
"We are very enthusiastic about Mexico's energy sector future, and we will leverage on our experience in developing projects that benefit the country," Cemex Chief Executive Officer Fernando Gonzalez said in the statement.
The company will invest $30 million in the new unit, to be called Cemex Energia, over the next five years, the statement said.
Cemex also said it had signed a joint venture agreement with Pattern Energy Group Inc, which owns wind power projects, to create 1,000 megawatts of renewable power in Mexico within the next half decade.
In a separate statement, Pattern said new legislation in Mexico, which mandates that 35 percent of Mexico's power must come from renewable sources by 2024, prompted it to expand into Latin America's second largest economy.
Mexico's energy reform, finalized last year, is President Enrique Pena Nieto's big bet to kick-start Mexico's long-lagging economy, by bringing private investors into the country's ailing oil, gas and electricity sectors to stem a 10-year decline in crude output and steep power costs for manufacturers. (Reporting by Cyntia Barrera; Writing by Gabriel Stargardter; Editing by Jeffrey Benkoe)
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