E Fibras: Mexico’s answer to MLPs

Author: | Published: 30 Oct 2015

Mexico's ministry of finance (Secretaría de Hacienda y Crédito Público) recently announced rules creating a favourable tax regime for a new exchange-traded vehicle. Known as E Fibras, these vehicles could not only change the way investment in the country's energy and infrastructure sectors occurs, but they could also provide a significant boost to Mexico's equity markets.

Initially, E Fibras are expected to be used by state oil company Pemex and the government's electricity provider CFE (which holds most of the power grid in Mexico) to monetise some mature assets and recycle capital to invest in new projects. Private companies holding already developed assets in the energy and infrastructure sectors will also be able to use these vehicles for the same purpose. Some assets that could be subject to investment by E Fibras include: midstream energy assets such as pipelines and storage systems for oil products; natural gas infrastructure (including liquefaction...