Private Equity Investment in Mexico’s New Energy Landscape

As Mexico rolls out its energy reforms, investors have already shown an appetite for infrastructure projects—from natural gas pipelines to wind farms. Out of 742 private equity funds focused in Latin America, 180 are looking to energy, in particular, said Bloomberg’s José Enrique Arrioja. Case in point is First Reserve and Blackrock’s March 2015 acquirement of an equity stake in the Los Ramones gas pipeline, the largest of its kind in Mexico. However, while First Reserve’s Adi J. Blum expressed excitement in Mexico’s natural gas potential and greater connectivity with the United States, he cautioned that energy consumers may not see the benefits of lower electricity prices for several years.

Panelists also discussed renewable energy projects in the works alongside Mexico’s requirements of environmental permits, which are often quite strict, said Partners Group’s Javier Chavarria. Wind power has expanded, especially on the border with the United States, where it is easier to sell wind energy to California as a result of cheap land in vacant Mexican territory.

– Adi J. Blum, Director, First Reserve
– Javier Chavarria, Senior Vice President, Partners Group
– Marisol González de Cosío, Director, Utilities & Infrastructure, Standard & Poor’s
– José Enrique Arrioja, Editor At Large, Latin America, Bloomberg (moderator)

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