• Led by a Spanish company, the project additionally involves twelve other Spanish companies and generates more than 50 million dollars of induced Spanish exports.

The Council of Ministers today approved the granting of reimbursable financing from the Fund for the Internationalization of the FIEM Company, managed by the Secretary of State for Commerce, for a total of 50 million dollars for the project called 'Morelos Gas Pipeline' in Mexico.

Obtained in international competition by a Spanish company, which will lead the execution of the project, this contract will open the doors to the presence of national companies in Mexico, a key market for Spain and our first market in Latin America. Likewise, it will additionally involve twelve other Spanish companies and will generate approximately 55 million dollars of induced Spanish exports linked mainly to the material necessary for the execution of the project with the consequent generation of national employment.

This is the construction and operation under concession of a gas pipeline that will provide natural gas transportation services to the Federal Electricity Commission (CFE) of Mexico, under a 25-year service contract. The 160-kilometer gas pipeline runs through the Mexican states of Tlaxcala, Puebla and Morelos.

The financing will have an amount of 50 million dollars and a maximum repayment period of 18.5 years, and is carried out for the first time in the FIEM for a Spanish private investor and under international market conditions. The FIEM credit, essential for the achievement of the project, will be carried out exclusively with the project risk and without recourse to the promoter (modality of Project Finance), as usual in these cases.

For the formalization of the contract, a total credit of 200 million dollars has been negotiated: one hundred million from the Mexican public bank Banobras; fifty million from the private bank Banamex-Citigroup; and the financing of the remaining fifty million that will be covered by the FIEM under repayable loan conditions and therefore guaranteeing that the operation does not generate any public deficit.

FIEM financing represents 25% of the project's debt and is carried out jointly with two entities with extensive experience in financing this type of operations in Mexico, with whom the project's risks and guarantees are shared. The operation has been extensively analyzed with recourse to specialized advisers and in collaboration with these co-financing entities. The approval of the Council of Ministers empowers the Official Credit Institute (ICO) to negotiate and sign the agreement for this credit, in its capacity as FIEM's financial agent.

This operation opens a new stage for the FIEM, taking full advantage of the legal possibilities introduced with the reform of this Fund in 2010, and allowing it to support the foreign sector of the Spanish economy with new instruments, a key element for the economic recovery of Spain.



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