Qué es la cfe

Nature of Operations /Business Description
Comisión Federal de Electricidad (CFE) is a Decentralized Public Organization of the Mexican Federal Government, created by Decree of the Congress of the Unión, with own legal personality and patrimony, which has as object to afford, in the area of the National territory, the electrical energy public service, same that consists in: to generate, tolead, to transform, to distribute and to supply electrical energy, as well as to plan and to accomplish all the works, facilities and projects that requires the national electric system in matter of planned, execution, operation and maintenance, with the participation that corresponds to the independent producers of energy, in the terms of the Electrical Energy Public Service Law and its Regulation.The responsibility in the rendering of the electrical energy public service shares CFE with other Decentralized Public Organization, denominated by the Federal Government as Luz y Fuerza del Centro (LFC), who has to its charge the distribution and sale of all the energy that is consumed, mainly in the metropolitan area of Mexico City and some neighboring states and, in minor measure, for somegeneration and transmission energy activities. Approximately 95% of the energy that distributes and markets LFC in its influence area, is purchased from CFE. The applicable rates for sale of electrical energy in the Mexican Republic are defined and authorized by the Federal Government.

CFE’s budget is part of the federal budget, and the Minister of Energy serves as Chairman of the Board ofGovernors of CFE. As such, CFE’s foreign currency long term debt ratings of BB+ by S&P and Baa3 by Moody’s are linked to the sovereign ratings of Mexico, reflecting CFE’s close ties to and support of the government as well as its economic importance as the sole supplier of electricity in Mexico.

Risk/ Mitigants
Despite the non recourse aspect of the pre-payment agreement (The non recourse issubject to Provisional Acceptance on CFE that will only occur it Siemens executes the project in accordance with the terms and conditions agreed with CFE. The transaction involves a perfomance risk, however we find perfomance risk on Siemens acceptable since the company has a longstanding experience in the execution of this kind of projects.
Energy Sector
Mexico’s energy needs are forecast to growat a rapid pace over the next 10 years. To meet demand, Mexico will have to invest nearly US $ 60billion in the energy sector over the next six years, most of which will be spent in the electric sector. The expansion will require an enormous amount of external capital, much of which is expected to come from foreign investors.

Private investment in Mexico’s electricity sector totaled USD3billion between 1997 and June 2000, representing 17% of the USD 17 billion total invested in the country from 1995 to 2000. Despite 1992 legislative reforms that allow private companies’ partial participation in the electricity sector, insufficient progress has been made in expanding capacity because of the growth in usage. Mexico’s government estimates that USD 60 billion of investments are required tosatisfy demand, which require the installation of an additional and substantial 22,000 MW generation over the next 10 years. Although Mexico’s generating capacity has increased significantly over the past decade, unless enough money is invested, supply is not expected to meet projected annual demand growth of about 6% over the next 10 years. Given current grid capacity, shortages could occur asearly as 2004. Failure to make the required investment in generation and transmission could adversely affect the international competitiveness of key northern region and the economy as a whole.

In 1999 former President Ernesto Zedillo submitted a proposal to the Congress to amend articles 27 and 28 of the Mexican Constituion. The restructuring proposal envisioned the disaggregation,...