Mexico to Incur Debt to Build Power Plants, Lines for Clean Energy Exports to US

The investment necessary to reduce Mexico’s emissions to 2030 is $48 billion, and the government will take on sovereign debt to build transmission lines and renewable energy power plants

Mexico's President Andrés Manuel López Obrador said that the United States is willing to grant "cheap credit" to build infrastructure for renewable energy transmission lines to the US border.
December 20, 2022 | 01:50 PM

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Mexico City — Mexico’s government has agreed to contract sovereign debt and for state-owned power utility Comisión Federal de Electricidad (CFE) to export clean energy to the United States.

President Andrés Manuel López Obrador, known as AMLO, said that the US is willing to grant “cheap credit” to build infrastructure for renewable energy transmission lines to the US border, and for CFE to build five clean energy plants.

“We accepted the commitment, not only as CFE debt but as sovereign debt, that is, the Finance Ministry would be responsible for carrying out the credit commitments. That helps us a lot to lower the rates,” AMLO said.

Foreign Minister Marcelo Ebrard mentioned that an agreement was reached with US Special Climate Envoy John Kerry to reduce polluting emissions through an investment of $48 billion for clean energy projects from 2022 to 2030.

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The CFE has already delivered its portfolio of projects for five renewable energy plants in addition to the solar park in Puerto Peñasco, the largest in Latin America, and which will be presented to US President Joe Biden during the tenth North American Leaders Summit in January 2023.

One of the avenues for financing would be the Bank of North America, although there would be others, and details will be presented during the January 9-11 meeting, Ebrard said.

Private US energy company Sempra Infraestructura already has some electricity export projects to the United States.

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López Obrador commented that although the United States insisted “a lot” on private investment, in the end it accepted that they would be CFE plants with exclusivity for their construction by US, Mexican and possibly Canadian companies.

“It will not be possible for companies other than Mexican and US companies to participate in the project, it is part of the trade agreement,” he said, referring to the USMCA, the Mexico, US and Canada free trade agreement.

AMLO told Kerry that his government did not want to contract debt, but would only do so if it was for Plan Sonora.

“It is the future of the country, it is the great industrial reconversion. We can no longer produce vehicles with fuel or internal combustion, it is not possible, everything is designed to be electric”, he added.