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Financing Mexico’s Energy Boom: Challenges and Opportunities

Guillermo Hernández - Aspiria


Perla Velasco By Perla Velasco | Journalist & Industry Analyst - Wed, 06/21/2023 - 13:48

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Q: What are the differentiators of Aspiria's renewable energy solutions?

A: Aspiria specializes in providing financial services to renewable energy companies. Unlike other products in the market that finance clean or photovoltaic energy projects, our solutions offer a swift decision-making process, typically within five business days, and in some cases, as fast as within two business days. Our flexible solar leases are structured to provide maximum comfort to our customers, allowing them to liquidate at any time. This feature sets us apart from most other solutions, which lock customers into long-term contracts of up to 15 years without an exit option. With our products, if you generate sufficient revenue to pay off the initial investment in the first year, you are free to pay it off. Plus, we say “yes” more often than the traditional banking sector and other financial institutions.

Finally, our products strive to be profitable from the start, providing customers with more economic benefits in the first year than the cost of the financial product itself. In some cases, a business can expect savings of between 20% and 30% from its first year working a solar lease with Aspiria. It is important to note that we currently only work with businesses that want to purchase solar panels and are looking for a financing option to do it.

Q: What are the biggest challenges that renewable projects or energy projects in general face in Mexico?

A: Mexico lacks knowledge about renewable energy technologies, which can make it challenging to convince potential customers to invest in them despite the rapid returns. This is similar to the learning curve seen with the introduction of smartphones in 2007-2008, when people initially questioned the need for them. The adoption of clean energy represents the introduction of a new technology and early adopters are driving its implementation. However, to truly make an impact, we need to convince a larger group of followers. This can be a difficult task given the challenges associated with convincing the market to embrace a new technology, as we have seen with other innovations in the past.

Q: When it comes to technology talent, how would you describe the landscape in Mexico and what would you say are the country's key strengths in this area?

A: Recruiting technology personnel in Mexico poses a challenge due to the scarcity of individuals with the required expertise. Even those who have the academic qualifications may not have practical experience. At our organization, we seek out individuals skilled in data mining, business intelligence, software development, data science and related fields. For aspiring tech professionals, joining organizations is the best way to gain practical experience. Once an individual becomes proficient in a specific area, the entire market seeks to acquire their talent. However, some new hires demand unrealistic salaries without considering the organization's investment in their development.

The renewable energy sector is also facing challenges as it is a relatively new industry and sees fierce competition to attract talent. We are struggling to find suitable candidates for our organization.

Q: What challenges do companies face when transitioning to renewable energy in Mexico and how can financing help address them?

A: Aspiria has a long-standing track record of financing numerous nearshoring projects, which is a trend that is gaining popularity fueled by various factors, including the rise of China as a manufacturing hub and the preference for US companies to relocate closer to home. We have been providing financial support for such ventures for many years. 

One of the challenges we encountered is the need for adequate guarantees to secure these investments. While we do provide some financing without guarantees, the ceiling is usually set at US$75,000. For larger financing deals, multiple guarantees are often required, however, we can increase the size of the financing up to US$750,000. Unfortunately, many companies struggle to provide these guarantees and, even if they do, they may not know how to monetize them. As a financial institution, we have the expertise to work with exotic guarantees and identify monetization opportunities that businesses may not be aware of.

Q: Which projects are you most excited about?

A: I am excited about the potential of renewable energy, particularly in the field of distributed photovoltaic energy. The benefits are clear: the return on capital is fast and it allows businesses to proudly display their environmentally-friendly initiatives. Our goal is to form alliances with various companies, including the largest solar panel producers, solar panel distributors, solar panel installers, consultants  and anyone that would like to provide financing for their clients' renewable energy projects.

In addition to our focus on renewable energy, we are also exploring opportunities in the conventional energy sector. We are actively seeking projects and companies that require financing for their own operations or for their clients' projects. Our goal is to provide the necessary capital to drive growth and success in this space.

Aspiria is a digital financial institution that aims to provide SMEs with access to financial services.

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