CPPIB dominates investments in infrastructure in Mexico in 2019 and 2020
Canada Pension Plan Investment Board (CPPIB) dominated productive investments in the infrastructure sector in Mexico during 2019 and 2020, ECLAC stressed.
The CPPIB was established in 1997 under the Canada Pension Plan Board of Investment Act, with responsibility for ensuring the long-term sustainability of the Canada Pension Plan (CPP). It is accountable to Parliament and federal/provincial finance ministers; however, it operates at a distance from the federal and provincial governments.
In Mexico, the largest productive investment operations concluded in 2019 and 2020 corresponded to the infrastructure sector.
At the end of 2019, an agreement was signed to transfer part of the ownership of the company Impulsora del Desarrollo y el Empleo en América Latina (IDEAL) to two Canadian pension operators, CPPIB and Ontario Teachers’ Pension Plan.
CPPIB
The Mexican company IDEAL belongs to the Grupo Carso and is dedicated to the construction of infrastructure: it operates 15 highway concessions, 3 transportation terminals, 2 water projects and the construction of several highways17.
Likewise, CPPIB and Ontario Teachers’ already had a presence in the infrastructure sector in Mexico, on the Arco Norte and Pacífico-Sur toll roads.
In March 2020, the two pension funds launched a compulsory takeover bid in order to acquire 40% of IDEAL’s shares, for which they disbursed close to 2,177 million dollars. With this operation, the Carso Group maintained control of IDEAL.
Roads
The second most important operation was the one carried out by the Spanish construction company Abertis. The operation was concluded in June 2020 and allowed Abertis to acquire 51.3% of the company Red de Carreteras de Occidente (RCO) for close to 1,658 million dollars.
With this, Abertis acquired control of the company18. RCO controls five concessionaires totaling 876 kilometers in total, and its network of eight highways is one of the most important in Mexico, since it forms the backbone in the central-west region and connects the country’s main industrial corridor, El Bajío, with the two largest cities, Mexico City and Guadalajara.
This operation was announced in October 2019 and, since then, Abertis has shown its intention to continue investing in the country and to reinforce its commitment to public-private collaboration.
In this sense, in February 2020, RCO signed an investment program with the Mexican Government to expand the highways of the concessionaire Fideicomiso de Apoyo para el Rescate de Autopistas Concesionadas (FARAC) in exchange for extending the concession for six years.
The company will invest more than 300 million euros in the construction of three toll-free branches to improve mobility in the states of Guanajuato, Michoacán and Jalisco.
