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Transition Industries LLC and IFC announce agreement

Published by , Editorial Assistant
Hydrocarbon Engineering,

Transition Industries LLC announced at COP28 that it has signed a joint project development agreement (JPDA) with the International Finance Corp. (IFC), to jointly develop its methanol production facility near Topolobampo, Sinaloa, Mexico.

When it initiates operations, Pacifico Mexinol is expected to be the largest single ultra-low carbon chemicals facility in the world - producing approximately 300 000 tpy of green methanol from captured carbon and green hydrogen, and 1.8 million tpy of blue methanol from natural gas with carbon capture.

Under the terms of the JPDA, the IFC will share a portion of the project development costs, provide substantial expertise to ensure compliance with the IFC Performance Environmental & Social Standards, and leverage its expertise to support the project financing. In return, the IFC has the right to invest in a pro rata percentage of the project’s common equity and lead the financing of at least 50% of the project’s debt.

Rommel Gallo, the CEO of Transition Industries, commented: “We are pleased to announce our JPDA with the IFC and proud to partner on this groundbreaking project. Together, we expect to set a new gold standard in ESG for the development of large industrial and chemicals projects that addresses climate change, sustainably manages natural resources such as water, and works in partnership with local communities to achieve shared value.”

Gallo continued: “We would like to extend a very special thank you to the Government of Mexico and its various secretariats. It is an honour to align with the Mexican government’s goals to promote development that is fair and equitable.”

Alfonso García Mora, IFC’s Vice President for Europe, Latin America and the Caribbean, said: “At IFC, we attract partners to invest alongside us as we provide capital to companies in developing countries, a process we call "mobilisation." By mobilising capital, we amplify the positive impact of our financing on the lives of people in developing countries. With this agreement, we contribute to the development of a project with the potential to reduce natural gas flaring, treat recycled wastewater, diversify Mexico’s chemicals capacity, increase exports and generate employment. At least 40% of the global production of methanol comes from coal. Decarbonising methanol production is an imperative for IFC.”

Pacifico Mexinol is expected to reach Final Investment Decision (FID) in 2024 and commercial operations in late 2027. The project is expected to generate on average 3500 jobs during construction and up to 450 jobs during operations.

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