Agreement for Economic Reactivation
On October 5, 2020, President Andrés Manuel López Obrador, together with the Business Coordinating Council, executed the Agreement for Economic Reactivation (hereafter the "Plan"), which includes a set of actions and infrastructure projects to be financed primarily by private capital.
The Plan seeks to finance public infrastructure projects in which the private contribution must be at least 50% of the total cost of the project. In this regard, the Plan announced 39 projects to be developed during the remainder of this year and the following, representing an aggregate investment of approximately $297.3 billion pesos ("MMP") in the sectors of (i) communications and transportation, (ii) energy, and (iii) water and environment.
Faced with the current challenging circumstances caused by the COVID-19 pandemic, the Plan intends to implement actions such as: (i) the implementation of the USMCA, through strategic alliances aimed at investment; (ii) the promotion of tourism, including the maintenance of highways, passenger trains, rehabilitation and construction of airports, and strengthening of public security; and (iii) achieving a continuous investment of 25% of the gross domestic product, based on the country’s competitive advantages.
In terms of the Plan, the 39 projects are distributed in three sectors, of which only 7 transportation projects are in progress. The rest of the projects were announced for the first time. The following projects and their corresponding investment are considered for each of the sectors:
From the projects listed in the Plan, the following stand out in each of the sectors:
Finally, the Agreement sets forth the following steps for economic reactivation: (i) carrying out investment packages; (ii) the preparation of new projects for the energy sector among the public and private sectors that strengthen the Federal Electricity Commission (Comision Federal de Electricidad) and PEMEX (Petróleos Mexicanos); (iii) the creation of a working group responsible for ensuring that projects start their execution on time; and (iv) monitoring the execution of the projects to achieve their operation.
Click here to download 'Infrastructure Investment Plan for Mexico' PDF in Spanish.
Gustavo Neyra Lopez (White & Case, Legal Intern, Mexico City) contributed to the development of this publication.