United Mechanical and Electrical Co. (United M&E) invested RMB 320 million (US $53.33 million) in an offshore energy efficient, environmental, and clean energy project. Subsidiaries Zhejiang United Mechanical and Electrical Co. and Insigma Technology Corp. accepted Mexico City Government's LED street light tender.
Constructions for the project to replace existing street lights with LED will take about six months. After installation was completed, luminaries will be rented out to the municipal government and United M&E relinquished future maintenance responsibilities. The company authorized an investment of RMB 55 million, has 55 percent stock share in its joint venture with Insigma to establish an offshore company for the city's sLED street light operations.
The aforementioned LED street light replacement project initially planned to replace 12,000 street lights in Mexico, investment is estimated at RMB 320 million. Around 30 percent was in equity funds totaling US $16 million. The remaining funds were taken out in the form of loans from a financial institute. Current cities in Mexico that have signed contracts for street light replacements include Cuetzalan, Mujica, Cuetzamala, Carmen, Cortzar, Vistahermosa, and Tulachanaral, a total of around 28,000 street lights amounting to US $20 million.
Mexico is politically stable and in a period of rapid socioeconomic growth. Mexico is continuing to develop and tighten economic and trade cooperation with European countries and the U.S. A recent visit to Mexico by Chinese President Xi Jinping strengthened ties between the two countries making the street light replacement project less likely to be terminated by political risks including end of bilateral relations, economic sanctions, and freeze on foreign assets, said the company. After the project is established, United M&E will no longer need to provide LED street light fixtures maintenance, making operation risk totally controllable. The company's operation fees are basically fixed, allowing them to guarantee the actualization of anticipated revenue. Additionally, with abundant market development experience in North and South America, Insigma has already taken on many street light replacement projects in multiple cities in Chile in 2013.
