MEXICO CITY — Mexican authorities announced Tuesday that there will be $20 billion in new foreign direct investment in Mexico, much of it neither new nor entirely certain.
Investor confidence in Mexico has recently been shaken by controversial reforms to the energy sector and judicial system, and the government wants to restore confidence in foreign companies.
Among Tuesday’s bigger announcements was what appears to be a final investment decision by Mexico Pacific LLC for an LNG gas terminal in Mexico’s Gulf of California, also known as the Sea of Cortez.
The $15 billion project will import U.S. natural gas, liquefy it and transport it to customers primarily in Asia. It is planned for Puerto Libertad, between the coastal cities of Guaymas and Puerto Peñasco.
“This is our largest foreign direct investment to date,” said Sarah Bairstow, CEO of Mexico Pacific.
However, the plan has been under consideration since at least 2020 and is still dependent on the approval and construction of a cross-border gas pipeline.
Mexican Economy Secretary Marcelo Ebrard said the second largest investment was a $6 billion commitment by Amazon.
Amazon Web Services had already announced in February that it would invest “more than $5 billion” to build cloud computing infrastructure in Mexico, although Ebrard did not specify its purpose.
And Ebrard said cruise company Royal Caribbean has committed to investing $1.5 billion in Mahahual, a Caribbean resort south of Tulum.
This is an apparent reference to the company’s plans announced last week to build a second “Perfect Day Mexico” land-based facility for cruise ship passengers in Mahahual. Mahahual was a sleepy coastal village until a cruise ship dock was built there.
Together with other projects, total investment could reach $30 billion in 2025, Ebrard said.
“President Claudia Sheinbaum’s message is that investing in Mexico is secure and safe,” Ebrard said at the event.
However, foreign governments and some foreign business groups have expressed concerns about a reform bill passed in September that would require all judges, including Supreme Court justices, to stand for election.
The fear is that it will politicize the case and put foreign companies, which clearly do not have the right to vote in elections, at a disadvantage. They worry that judges are more likely to listen to the will of voters than to the letter of the law.
And foreign energy companies are still trying to escape treatment at the hands of Sheinbaum’s predecessor and political leader, former President Andrés Manuel López Obrador, who stepped down on September 30.
López Obrador pushed for legislation that would guarantee state-run power companies a majority share of the electricity market. The reform puts foreign-owned power plants at the bottom of power purchases, even though they use more clean and renewable energy than the government’s dirty coal- and oil-fired generators. Ta.
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