MEXICO Trends and Developments Contributed by: Javier Domínguez, Santiago Carrillo, Gabriel Torres and Diego Rodríguez, Ritch Mueller
erly integrated at the federal level, have led to water shortages in different regions of the coun - try. Shortages have occurred especially in the northern region, which is the area of greatest interest to new investors due to its proximity to the United States. In addition, developers and investors face other issues that may affect the growth of nearshoring, which have been raised in conferences organ - ised by the GRI Club. First, there is a difficulty in accessing “green” or sustainable nearshoring in which the new industrial parks comply with the ESG requirements of foreign investors and of the different financing sources. Specifically, in addition to various certifications in the construc - tion and development of industrial parks, such as LEED and EDGE, that investors and financ - ing sources require, they are requiring that the energy sources of these nearshoring projects are renewable. Given the federal government’s ener - gy policies, this objective has become extremely difficult to meet. The other issue that developers and investors in the GRI Club conferences have identified as a barrier to nearshoring is the lack of clarity about local, state and federal processes and costs associated with obtaining permits and licences required to develop infrastructure and the indus - trial parks. Regulatory and bureaucratic barriers related to certain permits and licences in some municipalities and states (and especially at the federal level) create great uncertainty about the time required to obtain such permits and licences. Regarding the costs associated with the necessary infrastructure, the lack of support and compliance from the authorities at the three levels of government, as well as (ever-increasing) requirements, increase the cost of projects in ways that are often unexpected and cannot be budgeted for in advance.
UBS bank officials have pointed out that the development of industrial infrastructure is one of the main indicators that determine the effect of nearshoring during this first phase. Considering what has been discussed in the previous para - graphs, it seems that the lack of infrastructure is one of the main obstacles identified by key mar - ket players. In this regard, UBS officials agreed that Mexico has not seen a significant increase in the development of industrial infrastructure. The Tesla example The Tesla case is an example of the challenges that Mexico has in welcoming investors who want to set up their production processes in the country. In February 2023, the federal govern - ment announced the investment of the automo - tive company Tesla in the state of Nuevo León to set up a “gigafactory” of electric vehicles. The announcement was accompanied by questions and criticism about the viability of the project. Regarding water availability, several Nuevo León government officials have stated that nearby wells in the area where the factory will be built lack sufficient reserves to supply the residents of adjacent neighbourhoods. Regarding electricity supply, the government of Nuevo León revealed last October that the local government has made a commitment to build infrastructure to facilitate access to electricity for the factory, as part of the preliminary agreements for Tesla to complete its project in the state. The problems of water and electricity shortages stem from a lack of infrastructure, since in order to supply the gigafactory, the US company requires pipelines to channel water, power plants to pro - duce electricity and transmission lines to trans - port it. The example of Tesla illustrates some of the country’s limitations, and shows that govern -
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