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Mexico Banobras backs infrastructure with $4.9 bln

Thu Jun 11, 2009 4:44pm EDT
MEXICO CITY, June 11 (Reuters) - Mexican development bank Banobras plans to provide 65 billion pesos ($4.9 billion) in credit and guarantees this year to build highways and other infrastructure and help jump-start economic growth.

Mexico's deep recession has forced other infrastructure projects, like the plan to build the $5 billion Punta Colonet port on the Baja California peninsula, to be postponed or downsized, Alonso Garcia, head of government-backed Banobras, told Reuters.

"In this economic situation, financing has become more difficult for practically all infrastructure projects," he said. "The role of development banks has become a lot more important."

President Felipe Calderon has promised ambitious public and private investment to build highways, dams and port facilities to stimulate the economy, provide jobs and make Mexico more competitive.

The development bank recently agreed to loan Cemex, the world's No. 3 cement maker, up to 5 billion pesos ($375 million), guaranteed with revenue from projects the company has agreed to do in the future.

Hit by a downturn in the U.S. housing market, Cemex (CX.N: Quote, Profile, Research, Stock Buzz) (CMXCPO.MX: Quote, Profile, Research, Stock Buzz) is trying to refinance $14.5 billion in bank debt to avoid defaulting.

Banobras' portfolio of loans to state and municipal governments last year was 137 billion pesos, Garcia said. ($1 = 13.3525 pesos) (Reporting by Noel Randewich; Editing by Gary Hill)


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