Deregulation
The Mexican president has put forward a number of constitutional reforms to allow private sector companies to invest in the electricity industry in Mexico.
The proposed privatization is expected to be of special interest to US companies which see the Mexican power market as one that is ripe for exploitation. It is thought that the integration of the US and Mexican transmission grids could be the eventual outcome of a widespread privatization programme.
According to the president, Mexico will need at least $25 billion in order to allow the power industry to keep pace with the rising demand. It will, however, aone be difficult to fund this level of investment from public resources alone.
The new proposals would allow for a two year transitional period during which the constitutional amendments would be discussed.
Once this legislation has been passed, the national power company would be split into a number of regional companies. Stakes in these would gradually be sold to the private sector. However the state would maintain control of the transmission system and would regulate the industry.
The estimated total value of the power sector is between $100 million and $150 million.