Mexico City, March 13, 2008
—IFC, a member of the World Bank Group, and Mexico’s Ministry of Transportation today signed an agreement for IFC to help streamline the country’s concession program for new roads and attract more private sector participation. This agreement will support government efforts to improve Mexico’s competitiveness and quality of life.
Since 2003, the Mexican government has implemented a road program that has granted 13 concessions for over 900 kilometers of new roads to private sector participants. Under the new agreement, IFC and the World Bank will analyze the experiences from the concessions, including fiscal and legal frameworks, incentives and risk allocation mechanisms, and project preparation. IFC will provide an assessment and recommendations to help the Ministry of Transportation overcome bottlenecks and expedite the process, thus increasing the new concessions it offers to the private sector. Private investors, as well as commercial and development banks, have a strong interest in supporting new road projects within the concession framework.
Oscar de Buen, Deputy Minister of Infrastructure, said, “The agreement with IFC will help us strengthen and consolidate the frameworks that we have in place to attract private sector participation in infrastructure and complement public resources. This will support faster modernization of road infrastructure, allowing us to offer better services to users, increase our competitiveness, and achieve more balanced economic development among diverse regions in Mexico.”
Lars Thunell, IFC Executive Vice President and CEO, said, “One of IFC’s priorities in Mexico is to support the government’s efforts to modernize infrastructure and promote frameworks for effective private sector participation in the sector. Better infrastructure will be essential to attract more investment and increase Mexico’s competitiveness among middle-income countries.”
Since 2000, IFC has provided $780 million for infrastructure projects in Mexico, including syndications. This includes IFC support in September 2006 for the expansion and operation of a road between Irapuato and La Piedad in central Mexico. IFC provided a partial credit guarantee of up to 130.5 million pesos ($12 million equivalent) for this $75 million project, making it the first in the country to be offered in concession to the private sector under the new public-private partnership framework. IFC has extensive experience in advising on bidding concessions and structuring tenders for infrastructure projects, across Latin America and worldwide.
Mexico’s National Infrastructure Plan sets a target of $26.5 billion in investments by 2012 for construction and modernization of roads, of which $11.8 billion, or 45 percent, should come from the private sector.
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC's vision is that people should have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit
www.ifc.org
.
