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Questions have arisen surrounding the capability of Mexico’s state-owned Federal Electricity Commission (CFE) to pay for a proposed six new projects for its infrastructure.

The company’s new investment plan would require 62 billion pesos in funding, which would generate an estimated 4,438 megawatts of energy in turn.

Now, companies looking to potentially join in on the projects are saying there are a number of concerns about whether the CFE can hold up its end of the financial bargain, which it would attempt to do using the  Master Investment Trust (IMF). In just one proposed plant, the González Ortega plant, more than 10 issues surrounding the CFE’s ability to pay have arisen.

“The CFE is required to send the documents that explain the operation of the IMF in order to understand how the payments will be guaranteed to the winning bidder,” said one of the companies involved, revealing that its participation would be contingent on this information. However, the CFE simply said it would reveal this information prior to the submission deadline, with no specific timeline of return.

“What financial information of the contractor will be provided to verify its payment capacity or ability to obtain financing?” asked another potential bidder. “What are the payment sources that the contractor will use to make the payments at its expense derived from the contract?”

Still, the CFE has not revealed an answer, staking unparalleled confidence in the IMF’s trust that was only created last year. Unfortunately, international institutions do not seem to share the same confidence, as renowned rating agency Moody’s warned against the feasibility of using this trust for funding, while New York-based investment bank Morgan Stanley also called the IMF both vague and unrealistic.

The controversy comes following Mexico’s Secretariat of Energy (Sener) announcing the country’s electricity system, headed by the CFE, would not be able to reach its clean energy quota by 2024, as mandated by the Paris Agreement the country signed in 2016.

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