The Mexican government will offer priority in revenue streams to private investors in infrastructure projects, in an attempt to attract capital and strengthen the domestic economy in the face of external volatility.

The scheme, included in the Bill to Promote Investment in Strategic Infrastructure for Development with Wellbeing sent to Congress, is part of an ambitious infrastructure plan that envisages mixed investments with minority private participation and an additional investment estimated at 720.000 million (mn) pesos, close to 2% of GDP.

The secretary of Finance, Edgar Amador, stated at the 89th Banking Convention and in an interview with El Financiero that the model seeks to encourage private participation through significant financial advantages.

“Private companies will have a minority stake in the capital, but they will receive preferential treatment in the flows and the assurance that they will have the public sector as a strategic partner,” Amador told the Mexican outlet.

According to the official, the state’s participation as a partner would reduce uncertainty for investors, particularly regarding demand, by providing long-term contracts, as seen in the power sector with state utility CFE.

He also noted that this scheme could allow the consolidation of the projects on the balance sheets of private companies, which would increase their financial appeal.

Amador added that there is an initially positive response from the private sector and that the participation schemes may vary depending on the type of project, including roads, ports, and energy.

In this latter sector, which would concentrate around 50% of the projects, the energy secretariat is leading the strategy. “We are very encouraged by the initial response from investors to the project,” he said in the interview.

The plan is part of a strategy to strengthen the domestic economy. “We learned […] that, although our economy is extremely successful in the external sector, we must bet more on our internal strengths,” he indicated.

These statements are framed within the legislative initiative presented by the Executive, which seeks to create a special regime to boost investments in strategic sectors such as energy, transportation, telecommunications, and water, with the aim of speeding up priority projects and promoting regional development.

According to experts, the proposal aims to expand existing public-private participation mechanisms and to strengthen long-term planning through infrastructure.

(The original version of this content was written in Spanish)