Mexico moves to liberalization

Mexico moves to liberalization

Mexico`s energy secretary has said that the government hopes to complete restructuring of state-owned power companies by the end of the current administration.

Among the first tasks will be the reorganization of the Federal Electricity Commission (CFE) as well as the Compania de Luz y Fuerza del Centro.

Changes in the constitution will allow private companies to begin distributing electricity under regional concessions. Opposition to the bill, however, is expected from Mexico`s Congress.

Under the new structure, CFE and Luz y Fuerza will be divided into regional distribution and generation units. Initially, private companies will compete with state-owned power companies.

The move towards liberalization was given a boost with the appointment of Alfredo Elias Ayub as head of the CFE in January. Elias, a former deputy energy secretary, has most recently been in charge of Mexico`s airport administration agency, which is overseeing the privatization of most of the country`s airports.

– Mexico announced it would begin construction of four new power plants mainly in the northern region in the second half of this year. The four plants, which will produce 1350 MW, will be built by international IPP companies. Electricity demand is growing at a rate of seven per cent a year.

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