New Finance Minister Readies Public-Private Energy Prospects

Following Rogelio Ramírez de la O’s appointment as the new head of the Ministry of Finance, the 2022 budget proposal became an urgent priority. The proposal, which is part of the government’s aim to further involve the ministry in the energy sector, includes new public-private partnership opportunity for energy infrastructure projects, much like 2020’s priority projects within the national infrastructure program (PNI).

Energy projects are not the only topic to be featured in the plans. Ramírez de la O highlighted the proposal’s strong social goals and simpler tax codes to benefit SMEs. The newly appointed minister’s commitment to combat poverty and inequality is one of the key reasons he has been nominated by President López Obrador, since both have collaborated since 2006.

The third package of priority projects from the national infrastructure program, which is to be announced soon, will likely be of the biggest in importance for the energy sector. The previous two packages announced 69 projects with an estimated value of US$26.2 billion, issued in late 2020. The Ministry of Finance reported that of this amount, around US$10.2 billion worth of projects are under construction or already completed.

“The president is resolute not to increase tax rates or create new taxes. We are convinced that we have the room to make this happen while simultaneously accommodating spending needs, and this can be done by applying austerity measures,” said Ramírez de la O. To accommodate large-scale spending on energy infrastructure, the public-private partnerships established through the PNI will be an important tool for the government. "A continuous dialogue with the private sector is and will be decisive", he said. The involvement of development banks was also singled out as crucial in “the consolidation of economic recovery and as a pillar of sustained growth and inclusivity for the country.”

A memo from July 16 reveals that the Ministry of Finance is planning to be more involved in Mexico’s energy sector. “In this stage that is now beginning, the finance ministry will be more involved in the accounts of the energy sector and in promoting development banking,” the memo states.

Ramírez de la O furthermore committed to the government’s mission to rescue state oil company PEMEX. The national oil company is weighed down by billions of debt. "PEMEX’s situation continues to be delicate,” he said. “But we can stabilize the company from a financial point of view. I am going to claim my part in that coordination, because I know it is a very important issue."