Combustibles Ecologicos Mexicanos, S.A. de C.V.

completed

The project involves the start-up and development of the first CNG engine conversion and dispensing business in the metropolitan area of Mexico City. Combustibles Ecologicos Mexicanos (Ecomex or the company) is the only supplier of CNG for vehicle use in the Valley of Mexico. The Company currently runs two CNG dispensing stations and a workshop offering services for the conversion of vehicles from gasoline to CNG. At the end of year 2000, Ecomex sales amounted to US $2.9 million.Ecomex has to date, converted more than 600 microbuses, and its long-term strategy is to average 2,400 conversions per year by expanding and further developing its target market to include taxis, buses, and official vehicles. In line with this strategy, the company has embarked on a US$27.8 million project to (i) construct and operate 5 CNG dispensing stations in the metropolitan area of Mexico City (two of them are already in operation); (ii) operate one conversion workshop (already in operation); and (iii) provide working capital to finance the conversion of microbuses (the initial target market).The project concept relates to the use of CNG as an alternative fuel for vehicles in the highly polluted Mexico City, therefore generating important environmental benefits. Mexican authorities have been showing support to the use of CNG by (i) converting 480 garbage collection trucks and 750 police patrol cars to CNG; (ii) granting a waiver to converted vehicles from the "hoy no circula" restriction that forces vehicles to stay off the road one working day a week; (iii) extending by tree years the useful life of converted microbuses; and (iv) conceding fiscal incentives for conversions.