The Mexican government will help state-owned oil company Pemex to pay off debt this year by deferring approximately $2bn in taxes owed by the company to the state, Mexico’s deputy finance minister Gabriel Yorio said on Thursday

Pemex has already paid off around $6bn in debt for this year and has another $2.5bn left, Yorio told Reuters at the International Monetary Find and World Bank spring meetings. The company had a financial debt totalling nearly $108bn at the end of 2022 and pays a profit sharing rate, which effectively a tax paid to the government, of 40%.

Delaying Pemex’s payments of the profit sharing rate should allow the company to free up approximately $2bn in cash flow, Yorio said.

“We can do this quickly to provide liquidity to Pemex, not through a capitalization, but by allowing it not to immediately pay the royalty, the profit sharing rate,” said Yorio. “That roughly gives them $2 billion in cash flow.”

Mexico’s President Andres Manuel Lopez Obrador has controversially staked his reputation on reviving Pemex, which has been an important pillar in Mexican energy security since its creation in 1938.

Yorio also said that the Mexican government would not need to issue debt to finance a $6bn deal, finalised earlier this month, to purchase 13 power plants from Spanish energy giant Iberdrola. The deal will boost the state’s power utility Comision Federal de Electricidad market share to nearly 56% of Mexico’s total power generation, up from approximately 40% currently.

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Leftist nationalist Lopez Obrador has called the deal a “new nationalisation”, Reuters said. Yorio said “the cost that we agreed with the sellers is at the lower end of a range of prices we identified using different methodologies”. He added that future cash flows generated by the energy assets would help pay back investors.