CFE approves US$300 million loan to boost electricity grid

The Development Bank of Latin America and the Caribbean (CAF) granted the Federal Electricity Commission (CFE) a credit line of up to US$300 million to finance part of the plan to strengthen and expand the electricity system, with an emphasis on transmission and distribution infrastructure.

The agency explained in a statement that these resources will be used to deploy more than 1,870 kilometers of networks, with the aim of benefiting more than 44 million people throughout Mexico, as part of the expansion and modernization of the electricity networks.

CAF explained that the financed projects are categorized as Projects with Deferred Impact on Expenditure (Pidiregas), a scheme that allows them to be financed in the long term by the CFE once they enter commercial operation, generate income, and become self-sustaining.

The credit will be implemented in two parts: a loan of up to $200 million with a term of up to 15 years to partially finance electricity infrastructure projects.

In addition, a revolving credit line of up to US$100 million for short-term needs related to the investment plan, working capital, or other general purposes.

CAF Executive President Sergio Díaz-Granados said that “this financing reflects CAF's commitment to a just energy transition in Latin America and the Caribbean.”

The Mexican firm's Chief Financial Officer, Eugenio Amador Quijano, stated that “the support of development agencies, such as CAF, is essential for CFE to efficiently execute strategic projects for the electricity system.”

CAF framed this loan within the CFE's 2025-2030 Expansion Plan, which envisages investments of close to $30 billion, of which 57% will be allocated to generation, 30% to transmission, and 13% to distribution and telecommunications.