Advanced Search

LatinNews Daily - 23 June 2021

Click here for printer friendly version
Click here for full report

In brief: Electricity investment in Mexico to stall, warns Moody’s

* International ratings agency, Moody’s Investors Service, has said that it does not expect private investment in Mexico’s electricity sector to increase for the next three years, a direct consequence of a controversial electricity reform passed by President Andrés Manuel López Obrador’s government and which seeks to prioritise electricity produced by the state-owned electricity firm Comisión Federal de Electricidad (CFE) over private providers. In a report, Moody’s says that the reform could have negative consequences on existing contracts and lead private investment to stall for the next three years. This would in turn impact the CFE’s planned investment projects, forcing the company to take out debt to finance a swathe of projects, mostly destined for strengthening energy production. This could lead the CFE’s debt-to-equity ratio to rise from 61.7% in 2020 to 66.7% in 2024, Moody’s estimates.