LatinNews Daily - 20 April 2022

In brief: Moody’s welcomes Mexico energy reform rejection

* International credit ratings agency Moody’s has said that the rejection of President Andrés Manuel López Obrador’s electricity sector reform is positive for credit purposes. Mexico’s 500-member lower chamber of congress rejected the contentious reform on 17 April. Adrián Garza, vice president and senior analyst at Moody’s, said the decision was positive for private energy companies, as it “re-establishes the mechanism of dispatching energy in order of economic merit and eliminates the risk of immediate changes in the terms of power purchase contracts”. However, Garza said Moody’s expected that López Obrador would continue trying to overhaul the sector “especially in terms of renewable energy generation, with the aim of strengthening the state-run company Comisión Federal de Electricidad [CFE]”. Moody’s had previously warned that the reform, which sought to prioritise energy generated by CFE over that of private renewable energy companies, would dampen private investment in the sector and delay Mexico’s path to generating cleaner energy.

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