Electricity reform puts households’ investments and wallets at risk: Expert – Tech Viral Tips

Gaining control over electricity generation, as the government intended through electricity reform, would have a domino effect on investment and increase the country’s risk, making financing more expensive for national productive activity and for households, Rosnetti said. Barrios, energy analyst warns

“It is a prestigious issue, it affects the country’s risk, by influencing it, it increases the cost of financing the whole country,” he said during his participation in the workshop “Implications of Power Reform” organized by the Business Coordination Council . (CCE).

The constitutional reform initiative for the power sector, which will be discussed in open parliament starting Monday, proposes to reduce private sector participation in electricity generation to 46 per cent from the current 62 per cent; About a quarter intend to close and the rest, the conditions under which they will be able to live are unknown and then the problems will fall into the ‘domino effect’, the expert explained.

“It turns out that the contracts supporting their operations have disappeared today and are subject to the new monopony that will be represented by the CFE. This alone, without the need to do anything, significantly increases the risk of recovery of investments. shows growth; therefore, the clauses of financial institutions that lent money to build those plants because there was no guarantee of repayment of those loans would allow the bank to request payment as the risk changed”, he explained.

Reforms that can be made so that the CFE does not suffer some loss or consequence of the existence of permits prior to the 2013 reform, does not require changes in the constitution, “with regulatory adjustments and incentives … with this we are win-win.” could have achieved,” he said.

It will affect commercial treaties

For its part, trade agreements also consider the certainty of investments so those Mexico has signed will be violated, most notably T-MEC, said Vanessa, associate advisor to Strategy Public Consultants during the CCE event. Zarate said.

He said, “Business agreements in general seek investment protection, create scenarios of certainty, and obviously when a company decides to invest in its risk analysis, Mexico may not only be less attractive for investment in the region Will go.” CCE event.

In addition, the energy sector’s participation in producing greenhouse gases with more than 70 percent of emissions is so high due to a model based on fossil fuel consumption and proposed as part of the 2013 reform. Sandra Guzman, climate finance manager at CPI, said the transition to renewable energy is imperative in the context of the climate crisis, and incentives were created to accelerate that transition.

Thus, the private sector was the one that spurred investment and the state created institutions to make the energy transition and “it now intends to reverse that participation without creating an institutional framework that allows and fosters the energy transition.” gives,” he said.

It will weaken the legal framework

Miriam Grunstein, an academic affiliated with the Mexico Center at Rice University, said legal and regulatory risks have their own weight within the same financing risk and will play their part when it comes to investment analysis, which is about secondary laws. There is mention of the great uncertainty that remains. which prevents both the CFE and the participants from calculating their financial risks.

“What’s of great interest to banks is the rules of the game and we’re in limbo right now, and if legislators are given a chance to approve something that links us to an industry plan we won’t be able to follow.” Together, we’re going to be or illegally if it’s done differently, or in paralysis if it can’t be done and then litigation”, he indicated in a separate interview.