Mexico City Invests in Infrastructure While Reducing DebtBy Fernando Mares | Mon, 09/12/2022 - 15:00
During her Fourth Government Report as Mayor of Mexico City, Claudia Sheinbaum said that the city government reported a considerable reduction in debt without compromising its large-scale investments in infrastructure projects. She underscored that Mexico City had received validation because of its excellent resource management.
Sheinbaum highlighted that on April 30, 2022, the city’s public debt stood at US$4.6 billion, an amount 5.1 percent smaller than the US$4.8 billion reported in 2018. She pointed toward the local government’s responsible debt management strategy, allowing it to obtain good scores from credit rating agencies like HR Ratings and Fitch Ratings. In addition, Sheinbaum said that the Ministry of Finance (SHCP) recognized the city’s sustainable debt structure during 1Q22. “We have been acknowledged by HR Rating as the best subnational entity in Latin America in terms of public debt management. Credit rating agencies like Moody’s, HR Ratings, Fitch and S&P awarded the city high scores.”
According to Sheinbaum’s report, her government took on debt to develop infrastructure projects, particularly for transportation. Over US$1.5 billion were used for the construction of Lines 1 and 2 of the Cablebús system, US$85,500 for electric rectifier substations for the Metro’s Line 1, US$80 million for elevated trolleybus in Iztapalapa and US$55 million for the roadway corridor for the Metrobus’ Line 5, as well as US$231 million for the construction of the Electric Substation El Buen Tono for Metro’s Lines 1, 2 and 3.
Sheinbaum said that owing to the debt reduction, the city will be able to access new financing worth US$150 million, which will help it in developing further important infrastructure projects, like Metro-Energía. “We are replacing the supply, transmission and distribution network. CFE is constructing a substation, which is very important. Therefore, most of the [resources] will be used for the Metro-Energía project,” Sheinbaum stated.
In 2021, Mexico City’s government asked for US$226 million of debt. In 2023, the city government intends to ask for US$150 million to develop its projects.