Rodrigo Medina de la Cruz
Governor of the State of Nuevo Leon 2009-2015
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Nothern Giants Shares Investment Strategies

Wed, 02/24/2016 - 15:55

Q: What are the main accomplishments of Nuevo Leon in matters of energy, and how will these contribute to the long term prosperity of the state?

A: The government of Nuevo Leon has strived to maximize the benefits brought about by the Energy Reform through concrete actions. One of the main lines of action was to create new agencies specialized in the energy industry. An Undersecretary of Energy was created at a state level and it will be in charge of ensuring that the energy goals are achieved, as well as strengthening the business environment and promoting investment in the industry. The Undersecretary also follows the Energy Sector Plan of Nuevo Leon, which is a strategic document that describes the public policies and objectives related to energy. To support these nascent agencies, an Energy Council of Nuevo Leon was established.

This council will process information following a strict scientific criteria and make recommendations for public policy to the authorities. The council is conformed of representatives of the federal and state government, and noted academic and private sector leaders. We are also fostering the collaboration between private companies and the academic sector in order to develop talented technicians and specialized researchers in the energy sector. In addition, the Undersecretary of Energy has collaborated in the creation of new academic programs that are geared toward the needs of the industry. At the end of 2014 the goal of reaching US$1.5 billion of investment was surpassed with actual levels of US$1.6 billion, which is a record for the state and it is an increase of 47% compared to the previous year.

Q: What key strategies did you implement in order to increase investment levels in the energy sector of the state?

A: The model has been noted for its capacity to design, implement, and evaluate public policies of the energy industry. We support the development of energy projects across a wide array of sectors, from hydrocarbons to electricity and renewables. Transparency plays an important role and we take steps to ensure that the public is informed about the recent and most relevant energy projects in the state. I must concede that renewables is a fairly new sector and to date we have two projects in operation; nevertheless, thanks to our efforts over the last two years we have 12 new projects in the initial stages of development. It is important to highlight the contribution of the private sector since all the projects operating and under development have been fostered by national and international players. Executives of Nuevo Leon that had the vision of developing the first wind farm and it finally became a reality in 2013. Besides wind power, another sector that has caught the attention of investors is solar. Studies have shown that Nuevo Leon is highly attractive with annual irradiation levels of 6.5kWh/m2. The implementation of the Energy Reform will demand highly capable human capital and we are working directly with public and private universities in shaping strong educational programs.

Q: What role is the private sector playing in the development of gas pipeline infrastructure in Nuevo Leon?

A: The participation of the private sector in this area has been significant due to the new public policies created by the current federal government. The sector has opened its doors and naturally more resources are pouring into the development of infrastructure. The National Infrastructure Plan announced investments of MX$7.7 billion in the 2013- 2018 period and 51% of these resources have been allocated to the energy sector. The most important project in Nuevo Leon is the Los Ramones pipeline that demands an investment of over US$2.5 billion and it is expected to transport 1 billion cubic feet of natural gas per day. Thanks to this gas pipeline the industrial area Linares will have access to cheap natural gas and it will serve as an important tool for development.

Q: Natural gas has become the fuel of choice for many industries. How will this energy source spark economic prosperity in the state?

A: Investments in natural gas are expected to increase with each coming year, and in the last three years the state has been able to reach record FDI figures. There are many factors that come to influence the role natural gas will play in Nuevo Leon, which include the energy revolution in the US, drop in natural gas prices, proximity to the border, and increasing industrial activities. All these elements make it very attractive to develop combined cycle plants as these will help supply energy to industrial players in the state.