Transcript Financiera Sustentable de Mexico

Financing
a Cleaner Air
Air pollution: our main
enemy
• Air pollution attempts
against our own
sustainability since it is
the main factor of
environmental risk
against our health
Mexico City: A most
polluted and populated area
• Mexico City is one of
the 10 most polluted
cities in the world, in
terms of Ozone
exposure and PM10
suspended particles,
representing a threat to
its 20+ million
inhabitants, and climate
change to the world.
Transportation: the main
agressor
• Transportation is the
main agressor.
• It consumes 57% of
total energy, from
gasoline and diesel,
contributing to 100% of
CO2, 82% of Nox, 62%
of PM2.5 and 22% of
PM10.
Expansive transportation
systems enhance the problem
• The Urban Development
pattern, favoring secondfloor roads rather than
massive transportation
systems, has implied an
increase of transportation
as a main pollutant. In 20
years there has been an
increase of 70% in the
number of vehicles, from
3 to 5 million.
Government response
• Government response to
this threat has been to
restrict private vehicles
circulation. As a result,
70% of population has
increased demand for
public transportation,
representing a formidable
challenge to private
providers, since there is
no sufficient massive
transportation
infraestructure.
Mexico city: A big heart
• People suffering the most
from this problem are the
Base of the Pyramid.
• Mexico City is a big heart.
It pumps workers into the
center in the mornings,
and syphons them to
their homes in the
sorroundings in the
evenings.
• 22 million trips take place
into and out of the area
every day.
BOP: the usual buffer
• Lack of public
transportation is the
main problem for the
BOP
Lack of financing for
decent transportation
• 70% of public
transportation vehicles
need to be renewed.
This means 42,000
vehicles, or an
investment of 1,400
million dollars.
Lack of income to pay for
financing
• But even if finance
was available, the
transportation
providers have no
sufficient income to
pay for it.
Financing transportation vehicles:
the sustainable way
• At Financiera Sustentable we are providing finance to the
transportation service providers in a sustainable way:
– 1. We are enhancing their payment capacity by financing only
vehicles consuming vehicular natural gas, costing 40% of the
price of Gasolne or Diesel, liberating them the income necessary
to pay for the financing of a new vehicle
– 2. By using natural gas, they can circulate every day further
improving their income.
– 3. We are providing population at the BOP with better
transportation systems.
– 4. Most importantly, the new vehicles are contributing to a
better air.
– 5. All this in a financing model producing 0% non performing
loans and 40% return on equity to our shareholders in 5 years.
Providing finance
• Service providers are
organized in 40+
cooperatives. We went to
them to ensure we
understood therir
cashflows and needs.
• We then created a credit
product for them, where
they pay for their new
vehicles by adding a
surplus price per liter of
the natural gas consumed
everyday.
Enhancing payment
capacity
USD equiv.
Gross income
Fuel costs
Net Income
Financing and
insurance
Available income
Before
After
2000
2700
930
375
1070
2325
200
900
870
1425
Providing BOP with better
transportation systems
A cleaner air
• A natural gas car is the cleanest engine of all
fuels, including other alternative fuels. It
releases the lowest amount of greenhouse gas
emissions. Compared to all other vehicles,
natural gas releases 20 percent less carbon
dioxide, a main gas responsible for climate
change. Looking at total emissions, a natural
gas vehicle produces 90 percent less than a
gasoline powered car.
CHALLENGES AHEAD.
Financing a cleaner air
• So far we have financed the renovation of 300
vehicles.
• This is less than 1% of what is needed.
• To renew the vehicular infraestructure we need
1,400 million dollars.
• We will partly finance this by using savings
released to the service providers from the
financing scheme
• But Institutional investors are needed to speed
up the process
Financing natural gas
supply
• Increased demand for natural gas
by additional converted vehicles
has put a pressure on the
available stations.
• For supply of natural gas to meet
demand, we need to finance at
least 40 new stations, located in
strategic places where the
cooperatives charge their fuel.
This implies the need for 80
million dollars.
• Strategic allocation of service
stations will put them up in a
profitability path within 24
months, with expected rates of
return of 30+ for the investors.
Financing
a Cleaner Air
Thank you