Mexico’s legislature has recently passed a bill proposed by nationalist President Andres Manuel Lopez Obrador to strengthen state power company Comision Federal de Electricidad, or CFE, at the expense of the private sector. While the legislation has currently been halted by a Mexican court, its implementation could leave as much as $4.1 billion in Canadian assets at risk in the Latin American country, according to a Canadian government official who wasn’t authorized to speak publicly on the matter.
“Canada is concerned that the recently passed law that amends the Electrical Industry Law will be damaging to Canadian investment in renewable energy,” said Youmy Han, a spokesperson for Canada’s Trade Minister Mary Ng, via email.
Lopez Obrador’s push for greater state control and an apparent disregard for a pivot to cleaner energy is putting him at odds with U.S. President Joe Biden and Canada’s Trudeau. Under the proposed bill, private solar and wind farms would only be allowed to supply the grid after state-run power plants.
“All Canadian companies involved in the sector have expressed their concerns with these measures that affect their energy investments in Mexico, which Canada shares,” Han said.
Canada’s Ng and Mexico’s Economy Secretary Tatiana Clouthier Carrillo spoke about the legislation, according to a readout of the conversation from Ng’s office this week. The two officials also spoke about the need to maintain Canadian investors’ confidence by maintaining “a stable and predictable business environment for Canadian companies operating in Mexico”.