December 8, 2020

Mexico Launches Second Portfolio of Infrastructure

Holland & Knight Alert
Alejandro Landa Thierry | Carlos Ochoa

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.

Holland & Knight attorneys have extensive experience in finance, energy, transport and regulatory matters for the infrastructure and energy sectors, representing Government entities and private companies. Also have permitting experience for all type of projects. For more information, contact the authors or Holland & Knight's Mexico City office.

DISCLAIMER: Please note that the situation surrounding COVID-19 is evolving and that the subject matter discussed in these publications may change on a daily basis. Please contact your responsible Holland & Knight lawyer or the author of this alert for timely advice.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.

Related Insights