César Hernández Ochoa
Undersecretary of Electricity
Ministry of Energy
/
Insight

How Will CFE Overcome the Challenges Converting its Plants?

Wed, 02/24/2016 - 16:17

Many of CFE’s assets can be monetized in a way that generates resources that are not contemplated in the budget but are available in the market

A: CFE is proactively assuming the challenge of taking the necessary actions. The now-productive enterprise of the State has not been idle, and it has shown a great commitment to converting its old fuel oil-powered plants so that they can run on gas and combined cycles, and moving in a direction that is aligned with the goals stated in the regulations. The budget cuts were less severe for CFE than for PEMEX, and the utility company’s response was to dismiss some duplicated expenses, but it did not cancel any modernization projects. All its revamping plans and pipeline projects remain on the table, and the enterprise and its administrative council have been working on new financing schemes that were not possible in the previous framework. Now, thanks to the new legislation, CFE can create specific-purpose subsidiaries and use instruments that are already available in the Mexican market to finance some of its investment projects. Many of CFE’s assets can be monetized in a way that generates resources that are not contemplated in the budget but are available in the market, and these tools can be used to modernize the generation methods according to the plans and objectives.