Energy Sector Is Critical to Attracting Foreign Investment
Industry experts and key stakeholders agree that for Mexico to fully harness the potential of its industrial activities, the country must strengthen its energy sector and reap greater economic benefits.
The Mexican Business Council (CMN) highlighted relevant issues in the sector such as power production capacity, investment in transmission infrastructure and regulatory certainty as essential to attract more Foreign Direct Investment (FDI). As stated by Antonio del Valle, President, CMN, Mexico’s lack of electricity, especially coming from clean power, drives away millions in investment. While Mexico received US$35.292 billion of FDI in 2022, a 12% year-over-year growth, Canada doubled that and Mexico is missing that opportunity, said del Valle.
Del Valle said many companies are planning to move operations to Mexico, but for this to happen the country must address its energy issues, including the energy dispute based on the USMCA.
Moreover, considering the relocation of manufacturing companies due to supply chain disruptions, nearshoring has increasingly become an important topic for the industry. Rogelio Ramírez de la O, Mexico’s Minister of Finance, said the country can foster long-term economic growth if nearshoring opportunities are utilized. During the presentation of Nafin’s and Bancomext’s financial programs, the minister called on businesspeople to seize the opportunities created by this new wave of investment and highlighted that this process requires collaboration between the public and private sectors.
Nuevo Leon is a region of interest for nearshoring activities. The state has doubled its efforts to attract new investment. Its Minister of Economy, Iván Rivas, sees nearshoring as a “clear opportunity.” However, according to Rivas, one of Mexico's main challenges to exploiting the potential is energy, particularly transmission and distribution as the country’s infrastructure has weak links in this area.
Industry leaders will meet at the Mexico Energy Forum 2023 to discuss these and more topics relevant to the Mexican energy industry.