Mexican Investors Seek Green SolutionsBy Emilio Aristegui | Thu, 11/25/2021 - 14:54
Green energy investments are booming as companies seek to attract Mexican capital to develop cleaner solutions. However, President Andrés Manuel López Obrador’s energy reform withstands a major obstacle to promote competition in the energy market.
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Liquefied Natural Gas will overtake the market as countries aim for zero carbon emissions by 2050, said Salomon Amkie, Director of Banking, Capital Markets and Advisory, CitiBanamex. “Being close to one of the largest natural gas reservoirs globally, right across the border, and having access to both the Pacific and Atlantic, Mexico is in an optimal position for LNG export terminals. Pipelines have been built and with the proper regulatory and permitting processes, this could be a great opportunity for Mexico.”
The ‘buy now, pay later’ model is gaining momentum in Mexico and might become the preferred payment method of the future, said Senior Director of Marketing and Growth, Kueski, Regina Moreno. Kueski is orienting its products toward millennial and Gen-Z consumers, which hold a small share of the global wealth and are the most likely to need help when purchasing products or services.
“The Executive Board of the International Monetary Fund (IMF) renewed the Flexible Credit Line (FCL) for Mexico for two more years, which constitutes recognition of the soundness of the institutional framework for macroeconomic policies,” announced the Ministry of Finance and Public Credit (SHCP) and the Bank of Mexico. Mexico adequately complied with the IMF’s criteria, as Banxico’s medium-term anchoring inflation was deemed successful.
An investor sell-off led to the renomination of Jerome Powell to the US Federal Reserve; Powell plans to raise interest rates in 2022 to curb a 30-year high inflation rate. Growing stock will most likely slow its pace, as rates in Mexico, Canada, Brazil, Germany and the UK continue to go up. Startup techs suffered the biggest blow, Asana dropped 22.7 percent and Cloudfare dropped by almost 12 percent. However, Alphabet (Google), Amazon and Apple raced ahead, as Microsoft was the only giant to fall behind.
Fitch Ratings’ analysis on President López Obrador’s new energy reformfound that it is not likely to pass as presented and will likely not affect Mexico’s credit quality. However, if the reform were to pass, it would undoubtedly affect competition in the energy industry.
Two investment vehicles from capital fund Sancun seek to raise US$225 million to cooperate with Santander’s Asset Management arm. The goal is to invest in a Spanish renewable energy project linked with Mexican capital. Sancus Green Investment I and Sancus Green Investment II aim to attract Mexican capital but they are open to investors from all areas. Santander will invest US$22.5 million to the project and Sancus US$67.6 million, as the projects focus on photovoltaic solar.