US Warns of Investment Slowdown After LIE ReactivationBy María José Goytia | Wed, 04/13/2022 - 13:53
Amid the reactivation of the Electricity Industry Law of 2021 (LIE) by the Mexican Supreme Court, the US Embassy shared a statement warning that the decision will bring litigation against Mexico, as well as a further slowdown of private investment.
"The US government respects Mexico's sovereignty and its democratic processes. In this line of cooperation and respect is that we are concerned that LIE will likely open the door to endless litigation, generating uncertainty and obstructing investment," shared the US Embassy in a written statement.
In addition, US Ambassador to Mexico Ken Salazar also stated his position on the vote and its potential impact on North American competitivity. Salazar hopes that the resulting legal framework will support the creation of a clean energy powerhouse in North America, protect current and future private US investment in Mexico under USMCA obligations and safeguard the integration of US-Mexican supply chains.
Salazar also pushed for the resulting legal framework to establish a clear commitment to fight the climate crisis by producing clean, cheap and affordable energy. Salazar reiterated the US’ aim to turn North America in a global leader in the fight against the climate crisis by producing abundant clean energy with solar, geothermal, hydro, wind and other technologies. “Clean energy technologies can drive an integrated North American supply chain, as envisioned during the North American Leaders Summit,” he said.
Salazar highlighted the diplomatic effort the US has made to promote North American competitiveness. “My colleagues and I have advocated for this vision of North America consolidating as a clean energy powerhouse, and in our various meetings with Mexican government officials we have expressed our concerns about this and other proposed reforms,” he wrote
Furthermore, the National Renewable Energy Laboratory (NREL) warned that the uncertainty generated by regulatory changes in Mexico put up to US$17 billion of potential US investment at risk, as the modifications to the current legal, regulatory and electricity market frameworks "would create significant market entry barriers."
"Private sector investment is essential for Mexico to achieve its clean energy goals. However, the necessary investments will be difficult if changes are made to the legal frameworks of the current electricity market," concluded NREL.