MEXICO CITY: It was Mexico’s structural reforms and macroeconomic policies that led to the signing of a billion-dollar investment by a Canadian institutional investor, but security and corruption continue to be issues that can put the brakes on foreign capital.
The CEO of pension fund manager Caisse de depot et placement du Québec said Mexico’s solid economic framework and a stronger economy are reasons to expect significant growth, and make it more attractive than other markets.
Michael Sabia was in Mexico City to celebrate the Caisse’s alliance with Mexico’s three largest retirement funds and other investors which will jointly invest US $2.1 billion in infrastructure projects. The Canadian institution is putting up $1.1 billion of the total.
Sabia said it was the largest investment it had ever made in a developing country, but he sees great potential here for the development of pipelines, energy generation and distribution and port construction.
“Mexico’s infrastructure needs to be modernized, and that will help it grow more rapidly,” he said in an interview with Milenio. The new consortium of investors, known as CKD Infraestructura México, will look for opportunities in the generation, transmission and distribution of energy, transportation projects and others.
But long-term investors are watching the measures being taken by the federal government to deal with insecurity and corruption. Although change won’t come overnight, Sabia said, the issues require immediate government attention.
The Caisse’s new venture is not its first in Mexico. It signed an agreement in April with Mexico’s largest infrastructure company, Empresas ICA, to invest $3 billion in four transportation projects.
The Caisse holds 49% of the venture, which operates the Acapulco Tunnel, the Mayab toll highway, the Río Verde-Ciudad Valles highway and the La Piedad Bypass.
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