Mexico´s Strategic Opportunity to Lead Global Energy Transition

A few weeks ago, I had the privilege of joining a Wilton Park dialogue hosted in partnership with the Global Wind Energy Council, focused on the geopolitics of the energy transition. As part of the conversation, we reflected on how clean power is no longer just a tool to fight climate change, it is increasingly central to regional and domestic energy security.

Clean energy is abundant, local, and geopolitically resilient. Technologies like wind, solar, storage, and green hydrogen are now globally competitive and widely available. In this context, middle powers like Mexico have a unique opportunity: not only to reduce emissions, but to strengthen national security, build industrial competitiveness, and shape the rules of the new global energy system.

From Energy Follower to Clean Energy Shaper

Mexico is exceptionally well-positioned. With some of the world’s most competitive solar and wind resources, integrated supply chains, and preferential access to North American markets, we can be more than just a clean energy adopter. We can become a clean energy hub.

But to do so, we must strengthen our economy to attract investment. We must help shape the institutions, standards, and financial tools that define how energy capital flows in the 21st century.

Finance and Institutions: A New Strategic Agenda

Emerging alliances like BRICS+ and institutions like Multilateral Development Banks are already redirecting global investment flows. But Mexico must also work with regional political platforms like the Latin American Energy Organization (OLADE) to coordinate energy planning and regulatory harmonization across Latin America.

At the same time, climate finance must become a strategic instrument. In the first quarter of 2025:

• PEMEX reported losses of over MX$43.3 billion (~US$$2.12 billion) due in part to currency fluctuations.

• CFE also reported an MX$16.1 billion (~US$$820 million) loss tied to foreign exchange risk.

To move forward, Mexico must look beyond short-term market fixes and embrace strategic climate finance tools. This is where innovation matters.

One such tool is the proposed Clean Energy Exchange Rate Coverage Facility (ERCF) — a blended finance mechanism developed through a collaboration between researchers at Columbia University, the World Bank, and the World Economic Forum. The ERCF would provide targeted exchange rate risk protection for clean energy projects in developing countries by blending:

• Carbon credits

• Multilateral development bank capital

• Philanthropic and private investment

What makes the ERCF different is its performance-based approach: it only disburses if a currency depreciates below a pre-agreed level. This model protects foreign lenders from losses without distorting incentives, and it gives local utilities and project developers predictability in their financial planning.

For Mexico, adopting such a facility — or piloting it in partnership with MDBs and OLADE — would send a powerful signal: that the country is ready to lead the next wave of clean energy investment, not just with resources but with resilient, investor-friendly financial innovation.

Mexico’s Three Strategic Levers

1. Regulatory Harmonization – A Proven Model

Under NAFTA, Mexico aligned its appliance energy efficiency standards with the United States and Canada. As a result, refrigerator exports grew ninefold between 2000 and 2014, reaching US$3.7 billion and supporting over 100,000 jobs. Regulatory alignment fueled trade and industrial growth, a model we can replicate for clean tech.

2. CertHiLAC – Latin America’s Green Hydrogen Passport

Mexico is an active player in CertHiLAC, a regional green hydrogen certification system backed by GIZ, OLADE, and the IDB. Certification is critical to access markets in Europe and Asia, where buyers demand transparent emissions accounting. With CertHiLAC, Mexico can become a credible supplier of green hydrogen, not just in theory, but in trade.

3. U.S.-Mexico Grid Integration: An Untapped Asset

Despite having multiple cross-border interconnections, the Mexico–US electricity grid is used only for emergencies. A 2022 Institute of the Americas | Wilson Center´s Mexico Institute study shows that full integration could lower costs, boost reliability, and enable renewable power trading across North America. This is a strategic opportunity that aligns with USMCA goals and enhances energy security for both nations.

A Whole-of-Government Playbook

To seize this moment, Mexico needs policy coherence across government:

• Trade policy must ease the flow of certified clean technologies.

• Education must train workers for clean hydrogen, battery, and grid jobs.

• Finance and digital agencies must build the tools to scale carbon markets and green fintech.

Clean energy is not a sectoral initiative, it is a national competitiveness strategy.

The Window Is Open

Mexico has the natural resources, industrial base, and market access to lead. What’s needed now is an intentional strategy: aligning our diplomacy, finance, and domestic policy to drive investment, create jobs, and enhance energy security.

We stand at a unique geopolitical moment. With the right mix of ambition and coordination, Mexico can lead the global energy transition — and reap its full economic, environmental, and security benefits.