Investors interested in the energy sector in Mexico have had to adapt to regulatory uncertainty in the new environment, but agree that there remains a number of important opportunities available in the country, albeit, on a smaller scale, panelists at the International Energy Gathering virtual conference, organized by Mexico-based O&G Magazine, said March 24. Since assuming power in December 2018, President Andres Manuel Lopez Obrador's administration has taken multiple actions that benefit state companies in oil and gas and electricity. Most recently, the government made modifications to the electricity law that market participants swiftly blocked in court. Although none of the government initiatives have been approved, they create a level of uncertainty that is bad for investors, the panelists said. The modifications to the electricity law, approved recently, are one example, said Casiopea Ramirez, managing partner at Mexico-based Fresh Energy Consulting. Although they were suspended definitively by a judge, they add to the uncertainty, as they were the culmination of a series of steps taken by the administration to trump private participants in the electricity sector is likely to continue, Ramirez said, noting that the president has threatened to change the constitution to reach his goals. Government inaction is also causing uncertainty, panelists said. Alberto Merino, executive director of structured financing at Sabadell bank in Mexico, said the delay in interconnection permits has forced his bank to restructure certain projects.
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