Mexico - First loan administration report on the Bank's loans to Mexico

L-145 RESTRICTED This report is restricted to use within the Bank. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT FIRST LOAN ADMINISTRATION REPORT ON THE BANK'S LOANS TO MEXICO March 12, 1952 Loan Department Edition B  I -U.S. $1 - .8.65 pesos 1 peso -- U.S. $0.12 | 1 million pesos.- U.S. $1.15,607 I  FIRST LOAN ADMMNLTTktfION iEPOrT TABLE OF CONTENTS Parafpraihns INTRODUCTION PART ONE - Loan of W424,100,000 to Nacional Financiera, S.A. and Comision Federal de Electricidad (Comision Project) I, NEGOTIATIONS 1,- 2 II, THE LOAN 3 - 6 III. THE BORRCWERS 7 - 11 IT. THE PROJECT 12 - 1.3 V4v CHANGES IN THE PROJECT 14 - 126 VI.. PRCGRESS OF-THE PROJECT 27 - 34 VIIe EFFECTS OF THE LOAN 35 _-.39 VTII. FINANCIAL POSITION OF CFE 40 - 44 PART TWO (a) Loan of $10,000,000 to Nacional Financiera, S.A. and Comision Federal de Electricidad (Mexlight Project) (b) Loan of $426,000,0O0 to The Mexican Light and Power Company, Limited I. NEGOTIATIONS 45- 48 II. THE LOAN 49 53 ITTT THE BORROWER 5L4 56. T- vwTH FRo.TFCT 57 - V. rWANGFS TN T4E PRO.T7rT 59 - 6t) VIT PRrr.PRESOF n. TJFROJrT 6 _ 6 VTT r-PV7'r'rV M 'PUP. Tf)MAW AI VTTT Tnr AT TPtT.UA AP C * ,11_,,J.~* VJVWflL * J^;VAS*fl'4..f' -.1 I TIv FTTATICITAT OnSrTIrO QvW UEYTT('3'T '72 * A." a U .UV lfl'J.914J U ...-.L4 J.IJ. -JX *hLflJJAAI   Paragraphs PART THREE - Line of Credit of t1O,pOO,OOO in Favor of Consortium of Commercial Banks and Nacional Financiera' S. A. I. NEGOTIATIONS 83 - 86 II. THE LINE OF CREDIT 87- .90 III. LOANS GRANTED 91 - 95 PART FOUR S Relations Between the Bank and the United Mexican States I. POLITICAL AND GENERAL 96 - 98 II. CONSULTATION, NEGATIVE PLEDGE 99 - 102 III. ENABLING LEGISLATION 103 - 106 IV. COMBINED WORKING PARTY 107 - 109 ANNEX A - Annual Report T The Miexican Light and Pow,er Compar-y, Ltd. It is expected that the forthcoming report of the combined Bank-Mexican' Working Party (see paragraph 108):,will throw new light on the Mexican economy and that, in.particular, it will,contain statistics of foreign trade, na- tional income and produc,tion;.which will'supersede those at present available. For,this.rea$on, no econ6mic"section is'included in the present Report, and the usual Table of Basic Statistics is omitted.   FIRST LOAN ADIMINISTRATION REPORT INTRODUCTION This report deals with the following loans: ,2M,100,000 25 yaear 4% loan of January 6, 1949 to Naeional Financiera. S.A.. ind Comision Federal de Electricidad for the latterts electrin power dpvelopment nrogram; $10,aoo,00t Iea- Lk itnteroim loan of .Tanuary. 6; l9L9 to Nacional Financiera, S.A.,- and Comision Loeqn?-Ml de Elec1 +t-e.^; ^na fonr f.th Al Pn.trj,r poaver development program of The M.9exican T4Light ar Power" re-v,v,r Tjmnit+d. (Ref1lnded April 28, 1950). $26,o000,QOQ 25 year Wi% loan of April 2a, 1950 to The mexicsLtar, 4iIVt, aln"d Pr-rr VpVG- -VlF+^v8 4 for refunding the above $10 million interim loan and, 4to prov'dAe lul WIV J.ancn fo1CP,4r, the electric power development program; $10,000,400 3 2B line of credit of October 18, 1950 in favor of consortium of CoV-1imercia1 baks and Nacional Financiera, S.A, Deducting the refunded $10 million interim mexlight Project Loan, the Bank nas granted Mexico credits total- ing $60,100,000,. Of this tota4, $27.4 million have been disbursed as of September 30, 1951. PART ONE. Loan of 92h.100.000 to Nacional Financiera. SA... and Comision-Federal de Electricidad (Comision Project) I. NEGOTIATIONS 1. In April 1948, Nacional Financ4era,-S. A., ("Financieralt) applied to the Bank for a lo4n of about $109 million to finance the balance of the foreign exchange costs of the 19h7-52 construction program of the Comision Federal de Electricidad ("tCE"). The Bank and the Miexican   *- 2 - Government had previously agreed that, among a wide.-range of development Priottsc discussed with thei Pnnk in 1Q)i7- e_IletriG npwer nuvht to have priority. 2. As a result of discussions between the Bank and CFE, it was agreed .J~in N V ~IflL;1;. +ha+, forI- bo+ financ4a ar.d ei r. reas --omns,it w-a advisable to confine attention for the time being to the most urgently needed par+s ofe pP anmd,rv.m n,nA *nroie so.. of , h ha a1readnyr been begun with the help of financing from the Export-Import Bank and other bstJturc es, )0re 0 S r A 4. A 1he accol-d i_- 1 -S U*S cv ffi.; n was made in consultation with the private companies serving the areas con- wased ma gre tho esrfulcodntowihhirxpsonlareascn %.W. L1iU, .LAi )J.L lAVJ. L t1V =1 .