Spanish energy company Iberdrola is to invest €365m to grow in Mexico's booming wind-power market at a time when other international firms are also rushing to muscle in Latin America's second-largest economy.

Iberdrola will build a wind farm in the Southern city of Oaxaca, which is quickly becoming the country's wind-power hub. The project will have a capacity of 20 MW and employ 500 people during construction. The Madrid-based firm will also build a co-generaion power plant in Salamanca, Guanajuato.

The Oaxaca wind farm is the second of its type that Iberdrola built in Mexico since 2008.

This new investment announcement coincides with the similarly ambitious growth plans of Iberdrola’s compatriot Gamesa, which supplies many of the turbines used by Iberdrola in its wind farms south of the border.

Gamesa is hoping to supply at least 2,000 MW of turbines to the Baja California region and is sniffing around for other opportunities to both supply turbines and build wind parks.

Cannon Power and Union Fenosa are two other foreign power players hoping to do business in Mexico.

According to Mexican promotional agency ProMexico, the wind industry attracted $1.5bn in investments last year, generating 2.6m jobs.