Key Takeaways
- • CFE plans to raise approximately $1 billion in November 2026 through a share offering in CFE Capital, a transmission-focused vehicle, according to Bloomberg; the sale would be Mexico's largest cash equity offering since 2020.
- • About 40% of planned transmission investment is expected to come from the private sector, with the remainder from public funds, as President Claudia Sheinbaum's administration seeks to reverse years of underinvestment.
- • CFE Capital, dormant since its 2018 listing, has posted the highest returns among Mexico's REIT-like vehicles but trades at a steep discount to global peers.
- • CFE intends to grow the transmission grid by close to 7% during the current administration, versus no more than 1% over the previous eight years, and plans to roughly triple recent transmission investment within two years.
- • CFE plans to sell about one-third of the new shares to foreign investors and expects repeated follow-on offerings, with a power-plant-backed trust listing planned in coming years.
Summary
Comision Federal de Electricidad (CFE) plans to raise approximately $1 billion in November through a share offering in CFE Capital, an investment vehicle structured to finance new transmission lines across Mexico, according to Bloomberg. CFE Chief Financial Officer Eugenio Amador Quijano said officials will meet investors in New York in early November ahead of a possible offering before Thanksgiving. CFE Capital, which resembles a real estate investment trust and holds revenues from state-owned transmission lines, has been dormant since its 2018 listing.
The revival is tied to President Claudia Sheinbaum's effort to attract private capital into the power sector after years of underinvestment under former President Andres Manuel Lopez Obrador led to seasonal blackouts and strained grid infrastructure. CFE intends to grow the transmission grid by close to 7% during the current administration, compared with no more than 1% growth over the previous eight years. About 40% of transmission investment will come from the private sector, with the remainder from public funds. The utility also plans to list a trust backed by power plants in coming years and expects to return to equity markets repeatedly for follow-on offerings.
The fundraising marks a reversal from Lopez Obrador's nationalistic energy policies, which had shut out private capital. Sheinbaum's government has revived tenders for joint projects with private players, renewing interest from global funds in Mexico's energy sector. CFE Capital has posted the highest returns of Mexico's REIT vehicles but trades at a steep discount to global peers. About one-third of the original 2018 offering came from foreign investors, though international interest later dried up, leaving ownership concentrated among Mexican pension funds.
CFE plans to sell roughly a third of the new shares to foreign investors. The utility intends to triple recent transmission investment levels over the next two years, aligning spending with BloombergNEF estimates of what Mexico needs to meet growing demand and accommodate 32 gigawatts of planned generation projects through 2030. Separately, Citigroup is expected to divest more of its Banamex stake through an offering as soon as January, which could lead to a more active Mexican equity market after eight sluggish years for major listings.
The revival is tied to President Claudia Sheinbaum's effort to attract private capital into the power sector after years of underinvestment under former President Andres Manuel Lopez Obrador led to seasonal blackouts and strained grid infrastructure. CFE intends to grow the transmission grid by close to 7% during the current administration, compared with no more than 1% growth over the previous eight years. About 40% of transmission investment will come from the private sector, with the remainder from public funds. The utility also plans to list a trust backed by power plants in coming years and expects to return to equity markets repeatedly for follow-on offerings.
The fundraising marks a reversal from Lopez Obrador's nationalistic energy policies, which had shut out private capital. Sheinbaum's government has revived tenders for joint projects with private players, renewing interest from global funds in Mexico's energy sector. CFE Capital has posted the highest returns of Mexico's REIT vehicles but trades at a steep discount to global peers. About one-third of the original 2018 offering came from foreign investors, though international interest later dried up, leaving ownership concentrated among Mexican pension funds.
CFE plans to sell roughly a third of the new shares to foreign investors. The utility intends to triple recent transmission investment levels over the next two years, aligning spending with BloombergNEF estimates of what Mexico needs to meet growing demand and accommodate 32 gigawatts of planned generation projects through 2030. Separately, Citigroup is expected to divest more of its Banamex stake through an offering as soon as January, which could lead to a more active Mexican equity market after eight sluggish years for major listings.
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