How Water Neglect Threatens Mexico’s Nearshoring Boom

In recent years, Mexico has positioned itself as a prime destination for nearshoring. Global companies seeking to relocate supply chains closer to the United States now view northern Mexico as a strategic hub. Among the cities leading this wave, Ciudad Juarez stands out. Its proximity to the United States, skilled workforce, and mature logistics infrastructure make it an obvious choice for industrial expansion.

Yet beneath this promise lies a crisis brewing silently and persistently: water scarcity. Juarez faces a deepening water deficit, and the real danger is not just the lack of water but the lack of action.

Over 90% of Juarez's water supply comes from the Hueco Bolson aquifer, a transboundary resource shared with Texas and New Mexico. For decades, this aquifer has been overexploited. According to the Junta Municipal de Agua y Saneamiento (JMAS), Juarez extracts around 175 million cubic meters of water annually, while the aquifer only recharges with 35 million. To keep up with demand, wells are being drilled more than 100 meters deeper than in previous decades, making water access more expensive and lowering quality.

To put this into perspective: more than 6 billion cubic meters have been extracted from the aquifer, enough to cover the entire city in 15 meters of water. Experts estimate that economically viable extractions could run dry by 2030.

This isn't just an environmental concern, it's a looming threat to economic competitiveness, public health, and investment confidence. Without water, there is no nearshoring.

In 2018, at Hydrous Management, we proposed a forward-thinking, binational solution: integrate partially treated wastewater from Ciudad Juarez into El Paso’s aquifer recharge program. El Paso was already advancing this effort, processing up to 1,600 liters per second through advanced treatment technologies. These treated flows could be reinjected into the aquifer or reused as potable water.

The plan was simple in its logic and ambitious in its vision: a shared, cross-border solution to a shared, cross-border problem. While El Paso moved forward and now operates one of the most advanced direct potable reuse plants in the United States, the proposal stalled on the Mexican side.

The benefits were clear:

• A steady, alternative water supply

• Energy savings from reduced pumping depths

• Potential annual revenue of over MX$50 million (US$2.6 million)

• Increased industrial competitiveness

• A model that could be replicated across the border region

Furthermore, there was potential diplomatic upside. While uncertain, the treated recharge might have counted toward Mexico's obligations under the 1944 Water Treaty, offering strategic leverage in international water negotiations.

So why didn’t it happen?

Institutional fragmentation, bureaucratic inertia, and a short-term vision prevailed. While El Paso Water implemented its plan and secured more than 30 billion gallons of high-quality treated water for future use, Juarez remained tied to an increasingly unsustainable model.

To understand this missed opportunity, we must look at the systemic challenges in Mexico’s water governance. Agencies operate in silos, long-term planning is often overtaken by political cycles, and public-private partnerships are either mistrusted or misunderstood. Even when technically and financially sound solutions are presented, they often get buried under layers of red tape or dismissed for lacking short-term returns.

Meanwhile, El Paso Water embraced innovation. With clear regulatory support and community engagement, it transformed a pressing vulnerability into a future-proof asset. By treating wastewater to potable standards, El Paso gained both water security and investor confidence.

Mexico has a chance to learn from that experience and replicate it, not just in Juarez, but in other cities like Monterrey, Hermosillo, and Tijuana, where water stress is already limiting industrial growth. Hydrous’ model is scalable and grounded in practical execution: mobile, modular systems, decentralized infrastructure, and long-term financing that removes the need for heavy upfront investment by municipalities.

This model also has another key advantage: it promotes regional economic resilience. By reducing water-related risks, cities can better retain investments, attract new industries, and ensure a reliable foundation for job creation and sustainable urban growth. It also fosters binational cooperation on resource management, a topic critical in a climate-stressed border region.

Policymakers must begin treating water not only as a utility but as a strategic asset, one that underpins national competitiveness and international credibility. Ignoring this reality only delays the inevitable: deeper crises that are more costly to solve.

The tools, data, and technology are available. What’s missing is the political will. As Mexico continues to attract global manufacturing, securing a water supply is not a luxury, it is a prerequisite for growth.

It’s time to revisit this proposal, modernize it, and push for its implementation. Ciudad Juarez and other northern cities need to adopt binational thinking about water. The alternative is continued decline, higher costs, and the erosion of the very advantages that made them attractive to investors in the first place.

Ultimately, the question isn’t whether we can afford to act. It’s whether we can afford not to.