CAF supports the CFE with a USD 200 million credit line for Mexico’s sustainable economic revival

In order to support Mexico’s Federal Electricity Commission (CFE) in managing its working capital requirements, CAF—development bank of Latin America— signed an uncommitted revolving Credit Line Agreement with said State-owned Productive Company (EPE) for USD 200 million to meet its short- and medium-term financing needs.

“This loan is part of the set of tools to support the economic recovery of member countries that CAF has put at the service of Mexico, in this particular case, through support to the CFE, a leading public electricity supplier in the country, in order to contribute to its financial sustainability,” said CAF Executive President Sergio Díaz-Granados.

This operation is part of CAF’s regional countercyclical facility aimed at companies providing public services, in this case electricity, aimed at addressing the working capital financing needs of borrowers within the framework of the economic recovery of Latin America and the Caribbean. The aforementioned Credit Line will help the CFE not commit funds necessary for the development of energy infrastructure, which are critical for Mexico as a key element to boost the nation’s economic growth.

Similarly, the close relationship between CAF and the CFE is also evidenced by the support recently provided by CAF to the EPE through non-reimbursable technical cooperation resources for USD 200,000 to develop its technology adoption strategy and demonstration projects for energy storage systems, a technological option that is becoming increasingly used to balance changes between energy supply and demand and provide flexibility, reliability and stability to electrical systems.

Mexico was the first non-Andean country to join CAF as a Series C shareholder in 1990, when presidents of the Andean Community invited the member countries of the Latin American Integration Association (ALADI) to join the bank. Since then, the institution has played a pivotal role in supporting the venture capital industry in Mexico through investments in funds, with an emphasis on promoting the entrepreneurial ecosystem and business development for small and medium enterprises. CAF has drawn up a strategy in Mexico prioritizing initiatives to support projects for the economic development of the south-southeast region of the country; to promote and enhance private investment, the mobilization of funds from the private sector and financial partners for development and public-private partnership schemes, and identify mechanisms to channel financing to states and municipalities to enhance local productive public investment.