Please see today’s daily update from EPIC Investment Partners received this morning:
In a historic moment for Mexico, Claudia Sheinbaum has been elected as the country’s first female president after a decisive victory at the polls, a giant leap in Mexico’s traditionally machismo culture. Sheinbaum’s win represents a continuation of the nationalistic energy policies pursued by outgoing President Andrés Manuel López Obrador and his Morena party. Moreover, Sheinbaum is expected to live up to her reputation of being efficient, unlike many of her predecessors, an esteem she earned during her tenure as Mexico City mayor.
Sheinbaum has promised to double down on strengthening and revitalising Mexico’s vital state-owned companies like the oil giant Pemex and electricity utility CFE. The president-elect aims to invest heavily to modernise these strategic assets and position them as drivers of economic growth and energy independence for Mexico.
After decades of underinvestment, Sheinbaum believes prioritising and properly funding Pemex and CFE is the best way to unlock their full potential as key producers for the Mexican people. For Sheinbaum, revitalising Pemex and CFE is about more than just economics and energy self-sufficiency. It reflects her nationalistic vision of reasserting Mexican sovereignty over strategic industries and natural resources. While critics argue these state firms require private investment to thrive, the incoming administration seems committed to an opposing path of doubling down on government ownership and control.
With a strong mandate, Sheinbaum appears determined to make the revival of Pemex and CFE a top priority. She stated she will pour billions into upgrades at Pemex’s aging refineries, as well as complete major projects like the new Olmeca refinery and coker units. This would allow Mexico to slash its dependence on imported refined petroleum products. Sheinbaum also wants CFE to lead renewable energy development nationwide. This falls in line with her 2024-2030 roadmap, which aims to “decarbonise the energy matrix as quickly as possible”.
Mexico is one of only two G20 nations that does not have a net zero emission target. So Sheinbaum, a climate scientist with green ambitions, is clearly the right person to commence the shift. However, López Obrador’s legacy and influence would likely impede significant shifts from the current administration’s approach, potentially forcing her to pay a political price for substantial green reforms. Nonetheless, investors have welcomed the continuity and policy certainty presented by Sheinbaum so far. There is optimism that under the Sheinbaum government’s firm control over the energy sector will provide stability.
Sheinbaum’s presidency is a giant leap in Mexico’s traditionally machismo culture. Who would have thought the old boys’ club would be disrupted by a bold, green-thinking woman determined to reassert sovereignty? With her firm hand on the wheel, Mexico’s path to energy independence and decarbonisation is sure to be one wild ride. Buckle up, the age of mujeres is here!
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Charlotte Clarke
04/06/2024