2.2.9. Majority State participation under the Ministry of Energy (SENER

PRIVATE EQUITY INVESTMENT FUND AS A DEBT INSTRUMENT PRESENTATION

Public Private Partnership (PPP) Law provides benefits for private investors, such as the following: • It prioritizes Private Investment over Public Investment. • Encourages new schemes in Multiannual Budgets. • Proportional risks distribution. • Allows Investors to submit Projects without having been summoned and to receive reimbursement for expenses incurred. • It provides that proposals evaluation be based on Cost-Benefit criteria and disposition that favors agility in the bids. • Allows negotiation and, if necessary, property expropriation for projects development. • Allows Agreements modification to recognize surviving circumstances existence. • It grants amount reimbursement of Investments performed in the case of an early termination. • It solves technical or economic differences controversies between the parties, based on experts or arbitration. • In the absence of public resources, it facilitates assets divestments.

Private participation in the Public-Private Partnership in Mexico:

All of the above can be classified by source of payment according to the following: Pure federal budgetary resources.

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PROSPECTUS INFORMATION FOR ADITIONAL STRATEGIC INVESTORS

Combined: a) Budgeted Federal Resources. b) Non-Budgeted Federal Resources. Self-financing: a) Private Resources. b) Revenues generated by the Project. c) In-kind contributions from the Public Sector in the execution stage (Investment).

Through Private Participation, as advantages of Public-Private Partnerships (PPP) over traditional Investment, the State could achieve: The State does not invest during construction, it pays when it receives the service. It reduces budgetary pressure and does not generate public debt. The State diversifies and transfers its risks. Adequate operation and maintenance, improvements in the quality of service.

Electricity Industry Law and the Hydrocarbons Law allow Association of State Productive Companies with Private Sector to undertake projects along the value chain of both industries.

Private Associations with Petróleos Mexicanos (Pemex) and Comisión Federal de Electricidad (CFE), as State Productive Companies, through their respective Boards of Directors, may enter into Associations with respect to their Subsidiaries, with Individuals or Legal Entities of the Public, Private or Social Sectors, national or international.

Therefore, energy and infrastructure sectors, as well as the Government itself, present a portfolio of important opportunities, which require players with access to financing, as well as experience and capacity to act as partners to facilitate the optimal structuring of the projects.

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2.2 STATE-OWNED PRODUCTIVE ENTERPRISES.

With the constitutional reform on energy matters approved on December 20, 2013, a legal framework was established for the operation of t National Energy System, which generated transformation of Petróleos Mexicanos (PEMEX) and the Comisión de Electricidad (CFE) into State-owned Productive Enterprises.

In this way, a new public policy design was established, in line with international practices, which contemplates the separation of roles according to the following: