![]() ![]() Hans Joachim Kohlsdorf, an electricity wholesale executive in Mexico, argues that park owners often do not think strategically when setting up remote manufacturing hubs, and understands why the government is reticent to pay. Some argue that it is only right that the private sector pay its own way, especially given Mexico's relatively low corporation tax, and parks' healthy return on investment. The energy ministry said it plans to build around 3,000 km of transmission lines next year, as well as new substations, particularly in the north. Still, there is some hope for the new wave of 47 planned industrial parks. Meanwhile, Ramses Pech, CEO of energy consultancy firm Group Caraiva estimated 80% of infrastructure built in industrial areas is now privately funded. Indeed, 91% of parks report issues related to energy supply, according to a recent AMPIP survey, including line congestion and being forced to turn away new clients. "The CFE had a very different vision and budget before," said Bermudez, whose family has been in the "maquiladora" or remote manufacturing business for decades. Yet with billions dedicated to the heavily indebted state-oil company Pemex, industry observers say Mexico lacks the funds to support upgrades to the electricity network. Lopez Obrador has pressed hard to tighten state control of the energy sector, arguing that past governments rigged the market in the favor of private companies. "We needed a lot more," said AMPIP's Arguelles, noting the bulk of CFE's budget has gone to power generation rather than distribution and transmission infrastructure. Meanwhile, CFE built just under 150 km of transmission lines last year, more than 10 times less per 100,000 square km than in Brazil, where Electrobras said it added 8,679 km to the network. Last year, CFE investment slid to 35.3 billion pesos ($2 billion), or 0.15% of GDP, a fraction of manufacturing rival China's planned investment in the grid of 0.9% of GDP, per Reuters analysis. Mexico's approach to its groaning electricity grid is in contrast to its fast-growing peers, which tend to either incentivize private energy contractors or have state utility companies with deep pockets. "Mexico would be very well positioned to take advantage of nearshoring if it didn't have such an energy problem," he said.ĬFE did not respond to a request for comment. ![]() Though private sector assistance may help bolster Mexico's energy security in the short term, much more is needed accommodate the wave of new demand, said David Gantz, a fellow on U.S -Mexico trade at the Baker Institute. The issue underscores the holes in President Andres Manuel Lopez Obrador's attempt to concentrate power in the state energy utility company, CFE, which critics say is unfit to support Mexico's major growth opportunity. "It's very bureaucratic, it does slow us down," said Gallo. Gallo said such investments mean they have as much as tripled energy costs for clients in recent years, complicated by lengthy permit processes. American Industries is currently building a $12 million 12-kilometer (7.5-mile) line. ![]()
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