Mexican Energy Sector has “gigantic” needs (Sara Alarcon)


Mexican presidential candidate Claudia Sheinbaum’s team is discussing whether the nation should revive auctions for electricity and oil projects to help finance its vast energy requirements.

The need for investment to boost capacity means that private players could potentially play a greater role in the nation’s state-dominated energy sector, said Diana Alarcon, one of the candidate’s closest aides.

“In a country that’s growing, and where demand is going to expand, the space is gigantic for investment from both the public and the private sectors,” said Alarcon, who has emerged as a point-person for visiting investors seeking information about the likely next administration.

Campaigning formally starts March 1. The candidate, who is running for President Andres Manuel Lopez Obrador’s Morena party in the June 2 election, hasn’t committed to auctions or other specific energy policies or published a detailed manifesto.

Mexico’s current president, Lopez Obrador, reversed previous administrations’ opening of the sector to private capital and sought to strengthen the role of the national oil company, Petroleos Mexicanos. The nation’s tradition of a strong state presence in the sector to guarantee “energy sovereignty” won’t change if Sheinbaum wins the election, Alarcon said in an interview in Mexico City.

The candidate’s team is also discussing broadening energy exports including to markets in Asia and Europe, Alarcon said.

This month, Mexico’s Supreme Court voided Lopez Obrador’s electricity legislation, which privileged the state-owned utility over private producers.

Sheinbaum holds a 16 percentage-point lead over her closest rival, according to a recent poll.

When Sheinbaum was Mayor of Mexico City from 2018 to 2023 she hired Alarcon as chief advisor and foreign affairs coordinator, though the pair have known each since they were activists in the late 1970s.

Nearshoring Opportunity

The candidate’s team is interested in strengthening the trend of nearshoring, whereby companies from Mercedes Benz Group AG to Tesla Inc suppliers such as Taiwan’s Quanta Computer Inc open plants in Mexico to be close to the US and its giant consumer market.

Her team wants to ensure that new investment to Mexico leads to higher-value work rather than just assembly. The planning groups have discussed building up housing, health, and education infrastructure around nearshoring projects as a way to improve the retention of skilled workers.

The relationship with the US remains a cornerstone of Mexican foreign policy, said Alarcon, who is officially focusing on coordinating foreign policy working groups during the campaign. As Mexico, Canada, and the United States prepare for their USMCA trade deal up for review in 2026, the country will seek modifications to deepen regional supply chains, she added, without giving more details.

“It’s a marriage where there’s no possibility of divorce, and we have to know how to deal with our differences,” Alarcon said.

Source: El Financiero

The Guadalajara Post