Italian renewable energy company Enel Green Power has begun building a new $160 million wind farm in the southern Mexican state of Oaxaca.

The wind farm, located in the Isthmus of Tehuantepec, will be equipped with 34 3-MW turbines for a total installed capacity of 102 MW, the company said in a statement Tuesday.

Sureste I-Phase II, which will require investment of $160 million, will be able to generate up to 390 gigawatt-hours of electricity annually once construction is completed and it enters into service in the second half of 2014.

Enel Green Power, the renewables arm of Italian energy giant Enel, was awarded the contract for the wind farm by Mexican state-run electricity utility CFE.

The project includes an associated 20-year power-purchase agreement, the company said, adding that the electricity produced by the wind farm will be delivered to the grid through an electrical substation.

Enel Green Power has 197 MW of installed capacity in Mexico, with wind-power installations accounting for 144 MW of the total. EFE