Mexico Energy Reform Shifting Landscape for LIE Projects under the Proposed Energy Reform
THE CHANGES
The following changes represent a substantial departure of the current system:
Mexico has announced a proposed series of reforms to its energy sector (the “Reform”). The Reform introduces a new Power Sector Law (Ley del Sector Eléctrico, “LESE”), which replaces the existing Energy Industry Law (Ley de la Industria Eléctrica, “LIE”), and changes the regulatory framework applicable to the Mexican power sector. Once the Reform is approved by Congress and published in the Official Gazette, it will reshape market rules, re-establish state control over electricity generation, and limit private sector participation, significantly impacting existing projects under the LIE regime.
This note summarizes: I. the current regulatory framework, and II. the applicable rules once the Reform is approved, as well as the impacts on international and domestic investors with projects under LIE. Understanding the potential changes is important for planning and safeguarding interests across ongoing LIE energy projects.
