MEXICO’s corporate lobby has hit out at government measures to promote publicly owned electricity as a response to the coronavirus pandemic.

The Energy Ministry said that the need to ensure reliable electricity supply justified new rules promoting the state-owned electricity company and suspending production at a number of privately owned suppliers. The move prompted protests from the EU and Canada at the weekend that President Andres Manuel Lopez Obrador was “threatening foreign investment in the energy sector.” 

The steps include guaranteeing income for the state electric-power provider and boosting consumption of oil stockpiles.

Private energy suppliers say that the measures will shore up state-owned oil interests at the expense of renewables and hamper attempts to transition to a greener economy.

Transnational corporations have previously complained that Mr Obrador, who has already cancelled planned bidding on private oil exploration and forced private firms to renegotiate gas pipeline contracts, is reneging on contracts agreed by his right-wing predecessor Enrique Pena Nieto.

Duncan Wood of the US think tank the Wilson Centre’s Mexico Institute said that the latest rules were “very worrying.”

“This comes at the end of a series of signals that have been sent by this administration over the last 18 months that they do not welcome private investment in the energy sector and that they don’t really care what international investors think,” he said.

The Mexican Federation of Industrial Chambers called it “a violation of the rule of law … giving extra-legal powers to the federal electricity commission.”

But energy consultancy Gadex partner Eduardo Prud’homme said that, while there was “certainly an ideological element” to the measures, “the operating problems [that they address] are real.”