fw road competitive electricity markets mexico original message sandputil standardandpoors com mailto sandputil standardandpoors com sent thursday december 20 2001 10 02 rohauer tanya subject road competitive electricity markets mexico standard poor ratingsdirect link report reproduced standard poor web based credit ratings research service ratingsdirect click get free 30 day trial connection standard poor utilities oil gas project finance ratings team standard poor pleased provide ongoing service investment community research need capital investment push toward competitive electricity markets mexico driven need investment power generation reluctance mexican government continue add balance sheet debt form ipp contracts mexico forecast require investments power sector 5 billion per year next 10 years keep demand expected come private investors although current economic conditions may adjust forecast downward substantial investment still required sector even though ipp program successful thus far standard poor views contracts balance sheet debt cfe puts negative pressure cfe credit rating obligations many contracts cross default cfe debt turn cross defaults sovereign debt contracts also apply negative pressure sovereign rating pressure substantial today ipp program continues sole source new generation mexico obligations greater affect sovereign rating time therefore move fully competitive electricity market private investors take financing risks alleviate credit pressure sovereign electric sector interim comision reguladora de energia cre working creating framework potential liberalization industry cre envisions creation independent system operator manage generation commitment dispatch billing state owned generators would divided regional entities promote competition distribution sector would also divided several regional entities concession operation maintenance systems could granted transmission network would remain single public entity although concessions new transmission projects could granted liberalization electricity sector past nine years mexico gradually liberalized restrictions power market cfe enjoyed monopoly electric power sector many years although reforms instituted 1992 allowed ipps sell power cfe industrial customers self supply regulations 1996 cfe devised financing plan meet projected electric demand growth objectives plan lower company debt leverage finance projects lower cost extend maturities obligations result first time several new projects structured build lease transfers blt similar lease transactions structure third party finances builds plant transmission line transformer leases plant cfe period investment amortized end timeframe ownership asset transferred cfe blt arrangements indirectly assigned much operating risk cfe cfe required pay service even asset unavailable new facilities constructed ipp contracts arrangements structured take pay power purchase agreements whereby cfe pay power delivered next step would appear creation open market system participants free buy sell electricity yet outlook creation system unclear mexico given highly politicized tripartisan environment governs decision making process ratingsdirect link free service provided standard poor wish receive e mails related topic please send blank e mail leave projfin ratingslist standardandpoors com wish receive e mails topic please click send e mail subject unsubscribe ratings _ customerrelations standardandpoors com would like added list please send e mail join projfin ratingslist standardandpoors com asked confirm request report reproduced standard poor ratingsdirect premier source real time web based credit ratings research organization leader objective credit analysis 140 years preview dynamic line product visit ratingsdirect web site published standard poor division mcgraw hill companies inc executive offices 1221 avenue americas new york n 10020 editorial offices 55 water street new york ny 10041 subscriber services 1 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