Mexico

This report provides a summary of Energy Sector Management Assistance Program (ESMAP) supported activities in Mexico focused on the creation of a pooled financing p... Show More + rogram for multiple energy efficiency projects through a single debt instrument. The report is organized as eight chapters. Chapter one provides additional details regarding the ownership, structure and operation of an special purpose entity (SPE); it discusses the flexibility of this structure and how it can serve a pool of private or public sector projects. Chapter two provides an overview of the Mexican energy sector with a focus on the electricity supply, demand and pricing. Chapter three reviews the market potential for energy efficiency investments and provides comparative data on Mexico's energy prices and costs of capital in other countries where the energy efficiency and energy services company (ESCO) market is active. Chapter four reviews the current financial market conditions in Mexico, and the restrictive nature of commercial lending. Chapter five identifies the market, institutional and financial barriers to implementation of energy efficiency and ESCO projects in Mexico with a focus on financial issues. Chapter six provides an overview of the pilot SPE structures under development for the pool financing of multiple projects. A separate SPE is being created for public and private projects. Chapter seven reviews the current status of each SPE initiative, and takes a look into the future with a discussion of next steps. Chapter eight provides a summary of lessons learned from this project, and their application to future efforts in this area. Show Less -

The report looks at energy policies in Mexico (both a major energy producer, and consumer) within its economic context, how the energy sector is managed, and how it... Show More + performs, and at the implications for economic growth and public finances, and by extension, for broader social policies which depend heavily on federal funding. The energy sector finds itself in a vicious circle - reduced budget and borrowing capacity are leading to insufficient sector investment - resulting in declines in future production, hence government revenue. Breaking this vicious circle is a major challenge, given that attracting finance for energy sector investment on a major scale, without government support, lies at the heart of the problem. The report reviews the choices to increase efficiency, and electricity subsidies, as well as those for efficiently expanding oil and gas output. Three key areas for reform are discussed: a) achieving permanent gains in operational efficiency of the power and hydrocarbons sectors, to lower costs and improve service quality; b) restructuring electricity subsidies, targeting the poorest households; and, c) opening the hydrocarbons sectors to new players, attracting funds and skills, needed to undertake exploration, and development of the country's oil and gas resources. A policy simulation outlines the potential dynamic, general equilibrium model, assessing the economic impact of alternative energy policies. The analysis indicates that whereby an overoptimistic picture of the economic performance results from weak employment and wage estimates, conversely, the importance of increasing oil production will be undervalued, if the wage constraint is ignored, since this may be the single most important variable for ensuring that the real wage constraint does not bite. Show Less -

This report records the outputs of a technical assistance project in Mexico executed by the Bank's Energy Sector Management Assistance Program (ESMAP) to provide ex... Show More + pert assistance to the CONAE, the national energy conservation commission in Mexico. The assistance was made in the specific areas of institutional and policy analysis, and in program planning and evaluation. In 1995 an ESMAP mission was held where ESMAP experts met with CONAE staff. Recommendations on issues requiring more analysis were later provided in consultant reports submitted to CONAE. These reports are provided in full in the second section of this report. The key issues include: 1) CONAE has a weak legal foundation. 2) Funding for CONAE is unstable and subject to fiscal uncertainty. 3) CONAE has inadequate capability for planning and evaluation. 4) There is weak coordination between the various existing energy efficiency bodies. 5) There is potential conflict between CONAE's regulatory role and its promotion of voluntary conservation. Recommendations are discussed in the report, involving measures that need to be incorporated in the proposed energy efficiency law, as well as actions that need to be taken independent of the promulgation of that law. Show Less -