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Juan C. Serra, partner at Basham,
Ringe y Correa
opposition to projects from
local communities.” Serra says
states such as Oaxaca, Chiapas
and Tabasco have demonstrated
the greatest resistance to such
projects, given that they have
“more conservative communities
that are opposed to the presence
of large companies, either local
or multinational, that can affect
the natural resources of the
community”. He continues:
“While it is difficult to say if
social resistance to projects will
increase, as that will depend on
their location, mitigating such
opposition will depend on good
negotiations and communication
between developers and
communities in order to obtain a
so-called ‘social licence’ to avoid a
project being halted by conflict.”
Rodríguez says that, as the
auctions have progressed, some
law firms have seen their role
change. “In the first auctions,
our role was more regulatory and
administrative, ensuring that our
clients understood the process to
achieve qualification, but as our
clients began to understand the
process, our role has shifted to
challenging decisions and, in the
case of contracts already awarded,
the modification of those,
and we have also successfully
counselled clients on engineering,
procurement, construction and
financing contracts.” Rodríguez
says the biggest challenge for
clients is procuring financing,
given the long-term contracts
involved, the fluctuating price of
electricity on the spot market and
the low prices offered at auction,
which dropped to a record low
of $20 per megawatt-hour in
2017. He adds: “Developers have
to be very clear about entering
into commitments they may
not be able to meet having not
properly analysed the technical,
financial and legal aspects in the
rush to satisfy the demands of an
electricity generation contract.” In
the third long-term power auction,
which was held in November
2017, solar achieved a world
record average price of US$20.57
per megawatt-hour. Companies
assigned projects in the auction
included Enel Group and
Canadian Solar Energy Mexico.
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December 2018 • THE LATIN AMERICAN LAWYER •
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