Foreign direct investment (FDI) in Mexico has been a crucial pillar of the country’s economic development. In particular, FDI in the energy sector experienced a significant boom between 2013 and 2018, driven by the 2013 electricity reform that allowed private participation in electricity generation and commercialization. However, since 2019, FDI in energy has declined considerably, down 50.1% compared to the 2013-2017 period. This drop poses challenges for nearshoring, since shortcomings in energy infrastructure can limit the country’s ability to attract new investments and companies looking to relocate their operations closer to key markets such as the United States.
The BBVA Research report highlights that, although the energy reform opened up opportunities, the shortcomings of the National Electricity System remain a major obstacle. Without robust energy infrastructure, companies face additional risks and costs that can discourage investment. Furthermore, nearshoring, a trend in which companies move their operations to countries close to their main markets to reduce costs and increase efficiency, may not reach its full potential in Mexico due to these limitations.
To reverse this trend and take full advantage of nearshoring opportunities, it is crucial that Mexico invest in modernizing its energy infrastructure and adopt policies that encourage foreign investment. Only then can it establish itself as an attractive destination for FDI and strengthen its economy over the long term.
Conclusion
The decline in FDI in the Mexican energy sector underscores the need for continued reforms and infrastructure improvements to attract and retain foreign investment. A strategic focus in this regard will not only benefit the energy sector but will also drive overall economic growth and the country’s competitiveness on the global stage.
Source:
[BBVA Research: Falta de IED en energía con impacto potencial en el nearshoring](https://www.bbvaresearch.com/publicaciones/falta-de-ied-en-energia-con-impacto-potencial-en-el-nearshoring/)
