In October 2020, the Mexican government announced a $14.2 billion (MX$300 billion) infrastructure investment plan together with private sector companies for 29 projects as part of the Economic Recovery Agreement (Acuerdo para la Recuperación Económica) amid the COVID-19 pandemic. (See Holland & Knight's previous alert, "Mexican Government Announces US$14.2B Infrastructure Plan with 39 Projects," Oct. 7, 2020.)
On Nov. 30, 2020, a second portfolio was announced with 29 infrastructure projects totaling $11.4 billion (MX$228 billion) and consisting of projects in road, energy, water treatment and management, ports and logistics. More than 50 percent of the investment is set for the energy sector and more than 40 percent is set for roads.
What to Consider
The announcement shows an interest from the government and private investors to continue developing infrastructure in Mexico during 2021, when most of the projects will begin.
As indicated in the announcement, the government has selected these projects, of which the private investment has at least 50 percent share, for certain sectors (energy, communications and transport, tourism, water treatment and environment), and to provide social benefits and to not impact the public budget.
The portfolio represents 2.3 percent of the gross domestic income (GDI) and is expected to generate up to 400 direct and indirect jobs.
The location of the projects enable the infrastructure of a number of regions across the country, and complement the industrial and logistic capacity of Mexico.
Inside the Portfolio
All projects to be developed have diverse characteristics and different impacts across sectors, so it is important to keep track of the development and how it can benefit specific business or region.
Below is a summary of the projects.
- For the energy sector, the portfolio has two natural gas projects: a Liquefied Natural Gas (LNG) Terminal in Baja California to be developed by IEnova, and the transistmic pipeline of the Federal Electricity Commission (Comisión Federal de Electricidad or CFE) to be integrated into the Tehuantepec Isthmus Interoceanic Corridor (CIIT). In the electricity sector, CFE will develop six Combined Cycle Power Plan (CCPP) Baja California, Tuxpan Phase I, Merida, San Luis Rio Colorado, Valladolid and González Ortega, and a compression station in Tecolutla Lerdo.
- For the roads sectors, 16 projects will start works in 2020 and 2021 for enabling communications of municipalities and regions located in the State of Mexico, Colima, Puebla, Tamaulipas, Sonora, Baja California, Sinaloa, Veracruz, Michoacán, Nuevo Léon, Guanajuato and Chihuahua.
- In ports, a manufacturing facility for heavy components will be installed in Altamira Port, and in logistics, the T-MEC Logistic Park is set to take advantage of the new United States-Mexico-Canada Agreement (USMCA). Finally, two water desalinization and management facilities will be installed in Baja California Sur.