International Finance Corp. (IFC), a member of the World Bank Group, and the China-Mexico Fund (CMF), a $1.2 billion private equity fund managed by the IFC Asset Management Company (AMC), will invest $200 million in Citla Energy, SAPI de CV (Citla or Citla Energy), a Mexican independent oil exploration and production (E&P) company sponsored and controlled by affiliates of ACON Investments, L.L.C. (ACON).
IFC will commit an equity investment of $60 million and CMF will commit $140 million. The $200 million investment is IFC’s and the CMF's first investment in Citla Energy as part of a greater equity financing package provided by ACON, which includes capital from Mexican pension funds through a CKD managed locally by ACON. Founded by ACON in 2015, Citla is actively building a portfolio of selected E&P assets in Mexico, both independently and in partnership with other industry participants.
Mexico is one of the leading oil and gas producers in the world, yet faces a consistent decline in output due primarily to underinvestment. A groundbreaking constitutional reform passed in 2013 aims to promote private sector involvement in the Mexican oil industry through an unprecedented market liberalization coupled with the mobilization of resources by Pemex, among other measures. This investment is a result of the attractive economic conditions fostered by the reform.
Citla is uniquely positioned to develop a balanced portfolio of oil and gas assets, thereby opening up new hydrocarbon discoveries in the region, spurring broader participation of local companies and triggering economic stimulus and growth for the country. Citla’s portfolio expansion and growth will be achieved through bidding awards, acquisitions, farm-ins and partnerships with other operators.
Alberto Galvis, Citla's CEO, said: "This investment reinforces Citla’s position as an independent and institutional platform with resources to access carefully selected opportunities of the Mexican Energy Reform."
Jorge Dickens, Managing Partner at ACON, said: "IFC and AMC’s experience and footprint will be a great complement to ACON. This partnership will help make Citla a regional industry leader that will operate under the highest international standards."
Ary Naim, country manager of IFC Mexico, said: "As Mexico opens its oil and gas sector to private competition, IFC's goal is to support new players that combine strong sector expertise, local and global know-how, and adequate capitalization, and Citla Energy reflects all them. With this investment, IFC, AMC, Citla Energy and ACON send a strong signal of confidence in the Mexican Energy Reform agenda."
Cesar Urrea, head of the IFC Asset Management Company CMF, noted: "With this first investment in Citla, we are fulfilling the CMF's objective to bring substantial risk capital to support attractive investment projects that are partly a result of the Mexican Government's current reforms. We look forward to continuing to invest in new equity or mezzanine projects that help maximize the impact of the reforms and their impact on the country's social and economic growth."
IFC's strategy in Mexico focuses on supporting private sector investment to accelerate growth, improve competitiveness, foster social inclusion, and reduce poverty. As of Fiscal Year 2015, IFC's portfolio in Mexico totaled $1.4 billion representing investments in 57 companies. Mexico ranks seventh for IFC in terms of investment volume in a single country.
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