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Mexico's Agenda for 2020 in Energy and Infrastructure

Andres Manuel Lopez Obrador, Mexico's president recently issued the general criteria of economic policy for the country's 2020 annual budget. The document describes several undertakings to trigger economic growth in Mexico in the upcoming year. One of the main items in the economic agenda is to increase public-private partnerships and allocate public resources to the development of infrastructure for (i) the energy sector, and (ii) transportation.

Energy

The development of the energy industry is a priority of the current administration, and the following actions were named as part of the government's agenda for 2020:

  • Collaboration with the Mexican regulatory authorities such as the Comisión Reguladora de Energía (CRE) to simplify the regulatory framework;

  • Promotion of investment in the hydrocarbons activity chain, through schemes that involve the active participation of the private sector, particularly for transportation, storage, retail fuel sale and petrochemical projects; and

  • Development of the infrastructure for electricity by promoting the efficient use of public funds and private investment for the development of infrastructure for generation, transmission and distribution activities.

Infrastructure

In an effort to reduce the development gap between the north and the south regions of Mexico, there will be a special focus on the development of infrastructure in southern Mexico. The government has particular interest in the projects of the Isthmus of Tehuantepec, the Chiapas-Mayab Train and the Mayan Train.

The Interoceanic Corridor of the Tehuantepec Isthmus will be built as the focal point for the economic dynamism of the Interoceanic Multimodal Corridor. Mexico seeks to take advantage of the strategic location of the Isthmus of Tehuantepec and compete in the international market for shipping and transportation of goods, by using several transportation methods between the ports of Coatzacoalcos, Veracruz and Salina Cruz, Oaxaca.

In addition, the Mexican government is planning to develop infrastructure to improve the interstate and intrastate hydraulic systems. For this reason, the government will focus on building several dams and an aqueduct to increase the supply of drinkable water.

Lastly, the government will continue to promote direct foreign investment in a range of different sectors such as the automotive, aeronautic and pharmaceutic industry, among others.

In conclusion, it appears that under the economic criteria for Mexico's 2020 annual budget, Lopez Obrador's administration seeks to improve the country's energy and transportation infrastructure with public and private resources.

© 2019 Bracewell LLP

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About this Author

Manuel Vera, Bracewell Law Firm, Mergers Acquisitions Attorney
Partner, Foreign Legal Consultant

Manuel Vera represents U.S. investors in the acquisition of companies and assets in Mexico and other Latin American countries, and represents their interests in cross-border project finance transactions and joint ventures. He also provides legal counsel to U.S.-based financial service institutions, energy companies and investment firms doing business in Mexico and other Latin American countries. Mr. Vera’s practice focuses on Mexican and international corporate and commercial law, particularly foreign investment, project finance, banking, energy, real estate...

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Sylvia Cherem Energy & Finance Attorney Bracewell
Associate

Sylvia Cherem represents energy companies, financial institutions and investment firms in acquisitions, joint ventures and project finance transactions in Latin America. Her experience includes representing major oil and gas companies and the Mexican government in energy-related matters, including mergers and acquisitions, tax planning, and domestic and cross-border investments in the Mexican upstream and midstream sectors. Sylvia played an integral role in the recent biddings and regulatory compliance involving Mexico’s upstream sector. She advised international oil companies in connection with the legal and tax aspects of exploration and production contracts in Mexico’s Round 1 and Round 2 bids.

713.221.1423