GREEN ROOF EFFECT - ProMéxico

8 Negocios
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Clean Investment
Investors seeking opportunities in renewable energy should definitely
consider Mexico. The country has an abundance of renewable power
resources and a keen consciousness of the environmental and social
benefits of alternative energy development.
Mexico’s energy sector is undergoing a profound
transformation. The country’s consumption
of energy is growing much more
rapidly than in other countries and this has
become an important challenge.
In order to cover this growing demand,
a substantial number of projects will need
to be developed. Among them, generation
of energy through renewable sources arises
as a strong alternative to achieving the
country’s energy goals. The Mexican government
is planning to increase power generation
through renewable energy sources
over the next several years. According to
the National Infrastructure Program, 25%
of the country’s electricity should be generated
through renewable energy by 2012.
This means an unprecedented opportunity
for investors.
Given the country’s available renewable
energy resources, domestic and international
incentives regarding clean energy
projects and a recently modified legal
framework, investors seeking opportunities
in this kind of energy should consider
Mexico as an option.
Incentives for Investment
Mexico’s law encourages investment in re-
newable energy projects in several ways.
Federal tax laws allow for 100% depreciation
in the first year for all renewable
energy capital investment. There is also a
fiscal credit of 30% for research and development
of clean technologies.
Mexico’s law encourages
investment in renewable
energy projects in
several ways.
Federal tax laws allow
for 100% depreciation
in the first year for all
renewable energy
capital investment.
There is also a fiscal credit
of 30% for research
and development of
clean technologies.
Another source of incentives is the
Kyoto Protocol, which took effect in 2005
and aims to reduce carbon emissions and
address the problem of global warming.
Under the Kyoto Protocol, Mexico was
designated as an Annex II Country, which
means it is eligible for Clean Development
Mechanism (CDM) projects. The objective
of CDM is to displace future carbon emissions
by rewarding investors who build
power generation plants or other facilities
using cleaner technology as opposed to hydrocarbons,
coal or other fossil fuels that
produce harmful carbon emissions.
In Latin America, Mexico is second to
Brazil in the creation of carbon credits. As
of January 2008, the country accounted for
100 of the nearly 900 CDM projects registered
worldwide. About a third of Mexico’s
CDM projects are in the energy sector and
renewable energy projects in the country
account for the largest number of credits
awarded.
Once the Mexican government certifies
a project as a CDM, the United Nations
Framework Convention on Climate
Change has to approve it under the Kyoto
Protocol. Based on the number of carbon
emissions the project avoids by not using
carbon-based fuel, the owner of a CDM
project will earn carbon emission reduction
credits. These credits have economic
value that can be monetized and used as a
source of capital for the construction of a
renewable energy project. n