Chapters 7 through 9 show a continuum. It ranges from the financing of the first quasi-lPP on
a BLT basis (Samalayuca II); to the financing of the first true IPP (Merida III); to Bajio,
which was deliberately oversized to sell power to industrial customers; to La Rosita I and II,
which was similarly oversized, built on a site selected by the developer rather than CFE,
located to serve both the Mexican and the US markets, and had the flexibility to arrange its
own fuel supply in either the Mexican or the US market; and finally to TEG I and II, inside-
the-fence projects that can sell power to other users in addition to serving their own industri-
al sponsors under the rules of Mexican self-supply energy legislation. Until recently, PPAs
and fuel supply agreements were linked; now generally they are not, requiring IPPs to take
on increased fuel-procurement risk. Although Mexico gradually has introduced many of the
features of a deregulated, private electricity market, that market is still largely government-
owned and controlled and will be until CFE is privatised—and there is no telling if or when
that will happen.
(^1) This final section is based on interviews with the individuals quoted and articles in the financial press, including
Harrup, Anthony, ‘Mexico’s Electricity Hikes Seen Tied to Reform Agenda’, Dow Jones International News,
11 February 2002.
BAJIO, LA ROSITA AND TEG, MEXICO