With the recent approval of guidelines enabling mixed contracts between Mexico’s state-owned utility, the Comisión Federal de Electricidad (CFE), and private stakeholders, the country’s energy sector is entering a new phase. The mechanism aims to accelerate the commercial operation of strategic infrastructure projects through a co-investment model that shares risks, capital expenditure, costs and returns.
“The innovative aspect of these schemes is that they redefine the relationship between CFE and private investors, shifting from a logic of competition to one of collaboration,” said Arturo Carranza, Director of Energy Projects at Akza Advisors.
In his view, shared decision-making with a central player in the electricity system creates more favourable conditions to deliver projects in the short term.
The relevance of this framework becomes even clearer considering that Mexico’s Ministry of Energy — Secretaría de Energía (SENER) — forecasts electricity demand growth of between 3% and 5% annually over the next decade, with regions such as the south-east expected to expand at an even faster pace. Against this backdrop, Carranza stressed that private capital will be essential for expanding electricity infrastructure.
The ability to attract financial capital is another element that positions mixed contracts as a high-potential instrument.
“At present, we are observing strong interest from banks and investment funds in Mexican energy projects,” the consultant affirmed.
However, he warned that financial viability will depend on regulatory compliance. “When it comes to materialising this interest and securing financing, the most important factors relate to generation permits and grid interconnection agreements.”
From his perspective, coordination is the core of these arrangements. “If CFE and private partners can work together to obtain approval for these and other requirements, mixed-development schemes will be sufficiently bankable.” This alignment would facilitate regulatory approvals and accelerate project execution.
The regulatory framework establishes three procurement mechanisms for these projects: public tender, restricted invitation and direct award, each with specific technical and financial procedures. Under this model, private investors may participate by sharing costs, risks and capital investment, provided projects ensure sustainable financial returns and comply with criteria relating to reliability, security, accessibility and sustainability of Mexico’s National Electric System.
For each initiative, a Mixed Development Group (GDM) will be created, comprising representatives from CFE, SENER and the Ministry of Finance. The group will assess technical, operational, financial and socio-environmental feasibility.
The official document stipulates that contracts must include clauses covering legal structure, financing arrangements, rights and obligations, governance mechanisms and dispute resolution, offering safeguards for both parties and reinforcing project bankability.
CFE’s regulatory framework establishes public tender as the default selection mechanism, although it allows direct awards depending on the project’s type and urgency.
“Determining which investor selection mechanism will be used will depend on capacity requirements, technological needs and energy storage requirements of each development hub,” the specialist noted.
“The success of mixed-development schemes will be linked to the level of confidence CFE can convey to investors. It will be essential for CFE to clearly explain its expectations regarding private participation and what it offers in return,” he added.
Within this context, mixed contracts have been conceived as a response to the challenges of expanding and modernising Mexico’s National Electric System, integrating both conventional and renewable energy technologies.
“All technologies, whether conventional or renewable, have a role to play depending on future challenges,” the Akza Advisors executive stated. However, he cautioned that mobilising significant private capital towards renewable energy, solar PV, wind power and energy storage projects will require more than regulatory guidelines alone. Regulatory certainty and institutional coordination will be decisive.
“Authorities must generate sufficient conditions to provide confidence and certainty to private investors interested in renewable energy projects,” he said.
The scale of the opportunity is substantial. The government has announced that 54% of the USD 5.6 trillion expected to be mobilised in infrastructure projects in the coming years is linked to the energy sector.
In this context, inter-institutional coordination will determine whether mixed contracts become effective drivers of investment in renewables, grid expansion and long-term power system sustainability.
