MEXICO CITY — On Tuesday, Mexican authorities revealed a claim of $20 billion in newly secured foreign direct investment in the country. However, much of this figure may not be entirely new or fully guaranteed.
Investor confidence in Mexico has been under pressure due to contentious reforms in the energy sector and alterations to the judiciary. The government is making efforts to restore trust among foreign enterprises.
One of the significant announcements from the session involved Mexico Pacific LLC, which appeared to finalize its investment decision concerning a liquefied natural gas (LNG) terminal located in the Gulf of California. This substantial project, valued at around $15 billion, aims to import U.S. natural gas, convert it to a liquid form, and dispatch it mainly to Asian markets. The terminal is slated for construction in Puerto Libertad, which is situated between the towns of Guaymas and Puerto Peñasco.
Sarah Bairstow, CEO of Mexico Pacific, indicated that this investment marks the largest foreign direct investment to date. Nonetheless, this plan has been under consideration since at least 2020 and still hinges on the approval and construction of cross-border gas pipelines.
Mexican Economy Secretary Marcelo Ebrard mentioned that Amazon has made the second-largest investment commitment at $6 billion. Although Ebrard did not elaborate on the specifics, Amazon Web Services had previously announced in February an investment exceeding $5 billion for developing cloud computing infrastructure within Mexico.
Additionally, Ebrard revealed that Royal Caribbean pledged a $1.5 billion investment aimed at enhancing the Caribbean coastal resort of Mahahual, located south of Tulum. This seems to correspond with the company’s recent announcement to establish a new “Perfect Day Mexico” onshore facility designed for cruise ship passengers in Mahahual, which has evolved from a tranquil coastal village into a vibrant location following the construction of a cruise ship docking station.
Ebrard highlighted that these initiatives, along with others, could potentially lead to total investments reaching as high as $30 billion by 2025. “The message from President Claudia Sheinbaum is about certainty, assurance, and that investments in Mexico are secure,” Ebrard stated during the announcement.
Despite these optimistic declarations, foreign governments and various business groups have voiced concerns regarding a recent reform passed in September. This reform mandates that all judges, including Supreme Court justices, will be required to stand for election. There is apprehension that this development could politicize judicial processes, possibly disadvantaging foreign corporations that lack voting rights. This could lead judges to prioritize the opinions of their constituents over the strict application of the law.
Moreover, foreign energy companies are still feeling the impact of actions taken by Sheinbaum’s predecessor, Andrés Manuel López Obrador, who completed his term on September 30. López Obrador implemented regulations that favored the state-owned electric utility by securing a dominant position in the power market. These reforms effectively sidelined foreign-owned electricity generators, which often utilized cleaner and more renewable sources of energy compared to the government’s coal and fuel oil-based plants.
