Perspectives on the transport infrastructure sector

Regarding transportation infrastructure, investment opportunities for private equity in the railway and airport sectors will be very few and will be linked to the major operators of these sectors. The most significant opportunities will appear in the ports and roads sectors, and in urban mobility projects, and in many cases will take advantage of new technologies.

Current situation

Needs

Preserve and maintain existing infrastructure

Meeting a growing demand

Incorporation of new technologies into key processes (i.e., tolling booths, mobility)

Improving road safety

Reducing the carbon footprint of the sector

Opportunities

  • Acquisition of concessions in the secondary markets
  • Extensions of existing concessions
  • Development of projects through Non Requested Proposals
  • Taking advantage of rights of way with revenues of adjacent businesses (gas stations and road stops)
  • Generation of value by using technologies (fee optimization, eliminating cash, and safety)
  • Development of new port infrastructure

Perspectives of the hydraulic infrastructure sector

The growing number of metropolitan areas in the country has generated a critical shortage problem in the water supply, aggravated by the low levels of physical efficiency, and this implies opportunities for private investments in integrated agencies with adequate fees.

Current situation

Needs

Participation of regulated private investment to solve shortage and physical efficiency problems

Integrating agencies that operate in large metropolitan areas

Setting fee levels according to service

Establish fee levels that correspond with the service

Complying with environmental regulations

Designing offtake schemes in accordance with IFRS

Opportunities

  • Intersection of 3 characteristics: attractive metropolitan areas, integrated agencies, and adequate fees.

Reachable in the short-term (1)

  • Acquisition of a private concession in an attractive metropolitan area with adequate fee levels

Reachable in the medium-term (2)

  • Consolidated government agencies in attractive metropolitan areas with adequate fee levels

(1) Ex.: Puebla, Cancún, Aguascalientes, Boca del Río, and Saltillo

(2) Ex.: Guadalajara, Tijuana, Monterrey

Perspectives on the upstream sector

Deficient production of oil and gas at a national level creates the opportunity to participate in CSIEEs and Farmout contracts by means of agreements/alliances with private oil companies and operators who have technologies, financial capabilities and best practices at a worldwide level.

Current situation

Needs

Investment in new developments and production infrastructure

Increasing recovery factor

Improving input supply in productive wells

Investing in well maintenance and repairs

Opportunities

  • Farm-in fields in Field Development and Extraction production stages
  • Pemex has 25 production fields that it wishes to operate under the CSIEE modality
  • Investment agreements with Pemex, in which the capacity of Pemex’s infrastructure is recovered or expanded
  • Migrations of contracts without a partner; prior to the development of a business scheme that obtains a tax improvement

Perspectives on the midstream sector

Lack of infrastructure for hydrocarbon imports, transportation, and storage creates opportunities for private equity investment in storage and distribution terminals, and in duct infrastructure.

Current situation

Needs

Increase infrastructure:

Satisfy growing demand

Storage terminals

Technological solutions; increasing the pipeline network and reducing theft

Other opportunities:

Natural gas stations and transportations for supplying remote areas

Satisfy demand for power generation with gas

Opportunities

  • Demand forecasts for Natural Gas and Oil products will have a positive trend in next years
  • Storage terminals must be developed to provide reliance and strategic control for private commercializers
  • Developing systems with strategic assets in import and demand points in major regions with important deficits: Center, Gulf and Western regions
  • There are opportunities for Natural Gas in: i) liquefied natural gas projects, ii) existing assets, and iii) expansions of the gas duct system
  • Possible alliances with PEMEX for joint development of duct projects that consider technological solutions

Perspectives of the electric power sector

Growing demand will put pressure on low reserve margins expected in the ~2 years, and this will have an impact on higher power fees, thus posing investment opportunities for generation projects located in attractive nodes and without risks of transmission congestion.

Current situation

Needs

Satisfy the growing demand and increase reserve margins

Projects with the lowest possible environmental impact

Reducing shortage risk

Improving power quality

More transmission infrastructure and reduction of technical losses

Increase potency of the system

Opportunities

  • Implementing isolated supply or distributed generation
  • Generation close to consumption or behind the meter
  • Projects in regions with generation deficits and with nodes that have attractive market prices
  • Co-investment with CFE in thermal power generation
  • Projects with medium-sized offtakers that allow attractive prices in the PPAs and make bankable projects