Eduardo Reyes
View from the Top
Eduardo Reyes
Partner Power And Utilities
Strategy& At Pwc
Strategy& is a PwC consulting group dedicated to practical strategy advisory services to help its clients deliver on project execution.
Jorge Sandoval
Roundtable
Jorge Sandoval
Jorge Sandoval
Associate
Goodrich, Riquelme y Asociados

The first midterm auction is generating considerable expectations at a time when the third long-term electricity auction confirmed an aggressive downward trend in the prices offered. Financing appetite is impaired when renewable energy projects reach such low prices. The midterm electricity auction presents an opportunity where, by modifying the structural and commercial conditions on the supply side, it could pique the interest of private banking and investment funds in a system so far led by development and multilateral banking. This first edition will be decisive to determine the parameters under which private banks can consider the risk acceptable.

On March 5, 2018, CENACE published the official results of first midterm electricity auction in Mexico
Alan Sakar
Roundtable
Alan Sakar
Alan Sakar
Associate in Project Development and Finance
Clifford Chance

In the first and second auctions, CFE was the sole purchaser and virtually absorbed a measurable off-taker’s risk. Starting with the third auction, the Clearing House will represent a pool of purchasers per auction. Clifford Chance applauds the authorities’ design efforts when structuring the electricity auctions. We understand that some banks were involved in the structuring of the Clearing House, which is a strong sign that the government took into consideration certain bankability issues, which the banks would likely raise during the financing of the projects. We have no doubt this model will be replicated in other countries in the coming years. The success of the upcoming auctions will be largely based on the independent performance of CENACE, which will manage the risk of buyers’ nonpayment, the guarantees and the reserve funds.

Unlocking a country’s entire electricity sector to private initiative is not something done overnight.
Eduardo Reyes
View from the Top
Eduardo Reyes
Partner Power and Utilities of Strategy&
PwC
Strategy& is a PwC consulting group dedicated to practical strategy advisory services to help its clients deliver on project execution.
MEF 2018
News Article
Mexico Energy Forum 2018: The Chicken and the Egg of Financing and Viability panel highlights
MEXICO'S POWER GENERATION MIX JAN-SEP 2017
Analysis
Mexican regulators have pulled all the stops to provide a regulatory framework that will strengthen every link of the industry’s value chain.
Eduardo Reyes
View from the Top
Eduardo Reyes
Partner Power & Utilities
PwC | Strategy&
Strategy& is a PwC consulting group that is dedicated to practical strategy advisory services to help its clients deliver on project execution.
Many tasks lie ahead to mobilize new investment, develop regulations and institutions but the initial signs are positive
Analysis
2016 was the year the Mexican energy sector achieved escape velocity from over 70 years of a state monopoly in electricity.
Eduardo Reyes
View from the Top
Eduardo Reyes
Director of Energy and Infrastructure Strategy
PwC
The situation Mexico presents is not unique and the uncertainty is normal in this process.
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