Second Infrastructure Investment Plan for Mexico

Following our client alert published on October 12, 2020¹, described below are the projects announced in the Second Infrastructure Investment Plan, which includes 29 new projects, representing a total amount of MXN $228 billion pesos (approximately USD $11.4 billion).

Second Infrastructure Investment Plan

On November 30, 2020, President Andrés Manuel López Obrador, together with the Business Coordinating Council, presented the Second Infrastructure Investment Plan, ratifying the Agreement for Economic Reactivation executed on October 5, 2020 (hereafter the "Second Infrastructure Plan"), which seeks to finance public infrastructure projects in which the private contribution must be at least 50% of the total cost of the project.

The Second Infrastructure Plan includes 29 projects to be developed during December of this year and 2021, representing an aggregate investment of approximately MXN $228.6 billion ("MMP") (approx. USD $11.4 billion) in the sectors of (i) communications and transportation, (ii) energy, and (iii) water and environment.

The most relevant aspects of the Second Infrastructure Plan are the following: (i) 10 of these projects have already commenced construction, representing an investment of 43.5 MMP² (approx. USD $2.1 billion); (ii) 8 eight projects were included to ensure the connectivity of the General Felipe Ángeles International Airport, representing an investment of 78.4 MMP (approx. USD $3.9 billion); and (iii) construction of the first LNG terminal in Ensenada, Baja California; Energía Costa Azul, representing an investment of 47 MMP (approx. USD $2.3 billion).

The Projects

Relevant Sectors

In terms of the Second Infrastructure Plan, the 29 projects are distributed in three sectors, contemplating the following projects and their corresponding investment:

1. Communications and Transport: 18 projects, representing an investment of 110.2 MMP (approx. USD $5.5 billion).
2. Energy: 9 projects, representing an investment of 116.7 MMP (approx. USD $5.8 billion).
3. Water and Environment: 2 projects, representing an investment of 1.7 MMP (approx. USD $84 million).

Relevant Projects

From the projects listed in the Second Infrastructure Plan, the following stand out in each of the sectors:

1. Transport:
   • Naucalpan-Ecatepec Highway, with an investment of 20 MMP (approx. USD $998.3 million) and works commencement date by November 2020;
   • Southern Roads of the State of Mexico (Caminos del Sur del Estado de México), with an investment of 15.3 MMP (approx. USD $766 million) and works commencement date by December 2020;
   • Tultepec-Santiago Tolman Highway (Tultepec-Piramides Highway), with an investment of 8.6 MMP (approx. USD $432.8 million) and works commencement date by August 2021; and
   • Interserrana Highway (Monterrey Macro-Beltway), with an investment of 19 MMP (approx. USD $948.3 million) and works commencement date by August 2021 
2. Energy:
   • Liquefied natural gas (LNG) terminal Energía Costa Azul, with an investment of 47 MMP (approx. USD $2.3 billion) and works commencement date by January 2021;
   • Tuxpan Phase I Combined Cycle Plant, with an investment of 12.1 MMP (approx. USD $606.8 million) and works commencement date by June 2021;
   • Baja California Sur Combined Cycle Power Plant, with an investment of 4.9 MMP (approx. USD $245.6 million) and works commencement date by June 2021;
   • San Luis Rio Colorado Combined Cycle Power Plant, with an investment of 10.7 MMP (approx. USD $535.5 million) and works commencement date by August 2021;
   • Valladolid Combined Cycle Power Plant, with an investment of 13.3 MMP (approx. USD $666.5 million) and works commencement date by August 2021; and
   • Transismic Gas Pipeline, with an investment of 9.03 MMP (approx. USD $450.7 million) and works commencement date by July 2021.
3. Water and Environment:
   • Water Supply in Block, Desalination Plant Los Cabos, with an investment of 1.16 MMP (approx. USD $55.2 million) and works commencement date by May 2021; and
   • Water Management Improvement at Los Cabos, Baja California Sur, with an investment of 607 million pesos (approx. USD $30.2 million) and works commencement date by May 2021.

_{1 To consult the client alert, please refer to the following link: Infrastructure Investment Plan for Mexico.
2 Although the Federal Government mentioned that 10 of the 29 projects are already under construction, the list of projects included in its presentation only shows 1 project under construction as of November 2020 and 2 projects to commence construction on December 2020.}

Click here to download Second Infrastructure Investment Plan for Mexico (Spanish)

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