Regional Studies

index

Chapter 8
The case of Mexico

The institutions

Traditionally, the institutional structure of the Mexican energy sector has been characterized by the predominance of two large state-owned companies (the oil-company Pemex and the Comisión Federal de Electricidad, CFE), and the outstanding role of state planning in the sector.

The semi-official Secretariat of Energy, Mining and Industry (SEMIP) is responsible for national energy policy, while the Treasury and Public Credit Secretariat (SHCP) authorizes and allots financial resources, sets tariffs and imposes taxes on energy products.

An Inter-Ministerial Commission (Group of Fuel Policy) undertakes strategic planning for the energy sector, coordinates investments and evaluates environmental impact. The Energy Regulatory Commission (CRE) was established in 1995 as an autonomous government body. There exist also a trusteeship (FIDE) and an inter-governmental commission (CONAE), which are oriented towards energy conservation and efficiency.

Petroleos Mexicanos (PEMEX) monopolizes all phases of oil and gas production and commercialization. The company, which is vertically integrated, includes Petroquímica Basica (Basic Petrochemicals).

CFE and Luz y Fuerza del Centro are the public electric utilities in charge of the operation of the national power systems and electricity services.

Until recently, pursuant to provisions of the Mexican constitution, only the state was empowered to generate, distribute and store oil and derivatives, as well as electricity. Recent amendments connected with the integration of Mexico into the North American Free Trade Agreement (NAFTA) gave way to private-sector participation, especially in power generation and gas transportation and storage.

Energy sources in Mexico

In 1980-1995, total energy supply in Mexico grew 115% (59% per capita). Mexico counts on a large base of energy resources, with large oil reserves, natural gas, thermal coal and water resources. The country also has a rich solar and wind energy potential. Since the 1970s, however, when large oil and gas reserves were discovered, it has relied mainly on hydrocarbons to meet its energy needs (hydrocarbons account for 82.9% of the domestic gross supply of primary energy).

As a result of the discovery of oil, Mexico's position changed from that of a net importer of hydrocarbons to an oil producer with one of the largest oil reserves in the world. Mexico ranks seventh as a world hydrocarbons producer and tenth as a crude oil exporter. The main oil fields are in southeastern Mexico in the area of the Gulf of Mexico.

Pressed by its foreign debt, Mexico has tried to maximize oil exports to improve its payment balance. Mexico is also among the world's largest producers and consumers of natural gas, though exploitation of its gas reserves lags behind oil exploitation.

Only 34% of the country's hydroelectric potential is being exploited, and the share of this energy source in overall Mexican consumption is low. The present generation capacity would double if the already identified projects were implemented. Most hydroelectric projects are located in the least populated southeastern part of the country, and a large proportion of the electric power is transported to the central and northern regions. In the last decade, the importance of oil-fueled power plants has increased, while the relative weight of hydroelectric plants has declined.

Fuelwood is mainly used in rural communities for cooking, and sugar cane waste is used in sugar mills. Biomass accounts for 5.9% of the gross domestic supply of primary energy. Mexico has uranium reserves and several nuclear plants.

The new regulatory frameworks

The Mexican constitution defines the strategic areas for state involvement and those where private capital is allowed to participate. Section 27 of the Constitution sets forth that the Mexican land and water originally belong to the nation and that the nation has a right to transfer ownership to private individuals. It also establishes that the nation has the right to impose on private property those modalities that best suit the public interest; and to regulate, to the benefit of society, the exploitation of those natural elements that can be taken over, with a view to making a fair distribution of public wealth.

Until 1995, hydrocarbons production, distribution and storage, as well as electric power generation and distribution, were reserved to the state. After Mexico's adhesion to NAFTA, the barriers for private participation in electric power generation were removed, but electric power commercialization still remains under the Federal Electricity Commission (CFE), which operates as a vertically integrated public utility in charge of power transmission and distribution. Therefore, possibilities have been created for private sector involvement in power co-generation, either through subsistence production or independent production, but there is not a wholesale electricity market. Likewise, natural gas transportation and storage have been opened to private-sector participation.

The provisions of the Energy Regulatory Commission (CRE) on electricity and natural gas markets are focused on the relations between private agents and the state, and especially on supply agreements between independent producers and CFE. But there are important weak points in the regulation of electric power procurement by independent and small producers. The regulation trend is that higher electric power tariffs encourage private-sector participation in generation.

The new provisions on electricity exportation/importation—which are less restrictive than those established by NAFTA since they do not require the intervention of CFE as NAFTA does—could lead US companies to extend their power systems through installations inside the Mexican border that would not be connected to the Mexican national grid. In fact, southern US electricity companies may be interested in installing power generation plants on Mexican territory in order to profit from the economic advantages granted by Mexican environmental provisions, which are less strict than those of the USA, and export electricity through their own transmission lines in Mexico.

In the oil sector, where barriers to the entry of new agents still persist, the new regulations allow Pemex to develop a policy of international associations. This company's bias towards forming strategic alliances is revealed in several initiatives:

* A strategic association with Shell to increase Pemex refining capacity, purchasing 50% of a refinery in Texas;
* Establishment of Mexpetrol in association with private capital, to export services and goods in oil operation projects and in the petrochemical industry;
* Purchase of 3.5% of the stock of Spanish Repsol and the creation of an association for projects, co-investment and oil supply agreements, which has opened new market opportunities for Pemex in the European Union.

Energy policy. Energy sources

Mexican energy policy still focuses on oil as the most important energy resource—and oil income as the backbone fiscal income. The extension of the oil platform is considered of high priority, while Pemex's activities in hydrocarbon refining, processing and marketing—even first hand sale—are being encouraged.

Mexican policy aims at changing industrial consumption patterns, reducing consumption of oil fuels—currently at a 2:1 ratio as compared to natural gas in power generation; reversing the present relation by increasing natural gas consumption; and establishing environmental norms in critical urban areas and in the rest of the country.

The strategy consists of the following steps: making the necessary investments for the substitution of oil; giving priority to the use of natural gas; and seeking alternative outlets for oil displaced by the introduction of natural gas. Although Mexico has natural gas reserves, it must develop the fields as well as the transportation and distribution infrastructure to supply gas to consumers. At the same time, the conversion of two-thirds of CFE thermoelectric units from oil to natural gas has been planned.

The growing interest in gas can be partly explained by the aggressive pressure exerted by the Canadian enterprises Nova Corp and TransCanada, which, for several years, have tried to form joint ventures for gas production and distribution as well as for gas-fueled power generation.

As for electricity generation, there are plans to develop hydroelectric projects. No clear policy has been devised for the development of other energy sources.

Enterprise and market restructure

The integration of Mexico into NAFTA has broadened the field for private sector involvement in electric power generation and gas transportation and storage through constitutional and legal amendments. Privatization has been accompanied by cuts in employment and lower salaries and benefits, mainly for oil workers.

The privatizing proposal has given rise to resistance within government structures where some groups are not fully convinced of its benefits. According to these groups, energy is a strategic sector that should remain under state ownership. Meanwhile, Mexican society rejects privatization. This rejection is based on real experience: in the last 15 years, when privatization has further concentrated wealth and benefited mainly the friends and political comrades of the president in office.

At the same time, there are also powerful interest groups around the state monopoly of CFE that manage large resources and hold considerable power. Given the nature and range of energy sector operations, the sector offers many opportunities for corruption and fraud. These groups favor the status quo. Their resistance has deterred investments due to the lack of clear-cut schemes, eg, the sale of the petrochemical company and of CFE. Private investment has focused on the distribution of natural gas.

Foreign investors, however, do not appear eager to invest in the Mexican power subsector.

Financing of investments, prices and tariffs

The Energy Regulatory Commission (CRE) should be in charge of tariff setting, but in the case of electricity, the Treasury Department sets tariffs for CFE. This arrangement has created conflicts since the Treasury bases its tariff setting policy on macroeconomic and fiscal-balance—or even political—considerations that do not necessarily reflect the company's situation or the needs of consumers.

Electricity and oil tariffs in Mexico are well-below real costs. The federal government, through state-owned companies, has subsidized the use of electricity and liquefied gas for decades on the grounds that they meet the basic needs of the population. But subsidies could not be sustainable for an unlimited period of time, and they also encouraged the non-rational use of energy resources.

At the end of the 1980s, the government, together with the World Bank, began to restructure the tariff system to remove consumer subsidies. Recurrent crises have hampered its success, however, and although a steady tariff increase has taken place, CFE tariffs still do not cover costs. Every time tariffs approach real cost levels, a new devaluation occurs that widens the gap and subsidies rise.

Subsidies especially benefit big consumers and the richest areas of the country. The national tariff system is quite complex. It is divided by sector and by level of use on the grounds—according to CFE—that this protects consumers in areas with no local resources for generating the power they consume. This policy, however, has caused political strife: the peasants of Chiapas, one of the poorest Mexican states, complain that they are subsidizing consumption in the rich northern states.

The new tariff policy has been developed in view of private participation in the sector. To this end, tariffs will be raised to cover costs, and subsidies will hence be reduced.

Efficient use of energy

Energy conservation and efficiency are considered by some programs promoted by CFE and by some agencies oriented towards this end (such as FIDE and CONAE). Budget availability, however, is constrained if compared with the proposed objectives. The economic crises and lack of political will also limit allotment of resources to government and NGO programs that promote the use of renewable energy sources and energy efficiency improvements.

CFE has hindered the development of renewable sources such as solar and wind, using all available money for new conventional plants without consideration for the kind of technology used. Solar and wind projects have not made considerable progress, there has not been enough investment in these technologies, nor are they profitable in the short term. At the same time, CFE fears renewable energies as they may reveal its own inefficiency and the inefficiency of its thermoelectric units.

Environment and social impacts

The environmental impacts most studied are those generated by hydrocarbons production, transportation and industrialization, and those arising from oil derivatives, such as gasoline, oil fuel, etc.

The global emissions related to the energy system reached the following totals in 1993:

CO2 (tonC) 85.7 million
CO (ton) 12,841 million
NOx (ton) 1,887 million
SOx (ton) 2,061 million
HC (ton) 0.275 million
Particulates (ton) 1,084 million

The impacts on the shallow section of the Coatzacoalcos River is internationally considered to be one of the biggest environmental problems generated by oil and petrochemical industries. Fishing, agricultural and cattle-raising activities have become impossible in the area. The first refinery in that area was established in 1907 and it has now become one of the most important petrochemical centers of America with 65 giant petrochemical stations.

In the nearby state of Tabasco, crude oil extraction has already damaged more than 90,000 ha of land and water. The problems brought on by the oil infrastructure, namely, contamination by heavy metals, acid rain, water and land salinization, are the cause of health problems and of serious degradation of the regional ecology and economy.

Lack of maintenance of installations has led to a rise in the number of accidents in the last five years. This has coincided with the massive dismissal of oil workers with skill in the oil infrastructure. Over 8,000 km of pipeline and 110 installations have thus become "time bombs", as the workers have warned.

The urge for the extraction of oil to meet the growing national demand, as well as that of the United States, causes most of the environmental damages mentioned. It also jeopardizes the stability of the total volume of reserves, since accelerated extraction implies important losses of hydrocarbon volumes.

Mexico has significant hydraulic resources and hydroelectric energy has a great potential, but the way in which CFE has built and operated its hydroelectric plants has had a negative impact on local people and the environment. The construction of several dams led to the displacement of local people as well as to environmental damages.

The impacts of electric power generation include those of the nuclear power plant at Laguna Verde and several hydroelectric units. The impacts arising from dam construction and management and the displacement of people from their original settlements are probably the most severe social problems in the Laguna Verde area. This experience has given rise to peasant and native population movements that resisted different projects, some of them financed by the World Bank. For three years, peasants in the southeastern states have opposed dam management that threatens to flood their subsistence agricultural lands.

Nuclear reactors have also had a negative impact on the environment through radioactive water discharges into small lakes and lagoons, leakage of radioactive gases and liquids and discharge of tens of tons of radioactive wastes annually, including the lethal plutonium.

Power tariffs are an important factor in terms of social impact. In the state of Chiapas, CFE has cut off electric power supply to hundreds of communities (and thousands of users). These users—either small enterprises or peasant and middle class families—applied for a special tariff to the state because their water resources constitute an important source of hydroelectric energy for the country and the population of Chiapas is among the poorest of the country. They also argued that for the last ten years CFE has used their lands to build dams but has failed to pay land taxes on its own lands. According to CFE reports, 131,000 users from the state of Chiapas have become indebted to the company. The situation has reached crisis levels, since it creates a vicious circle: default on payment-massive cuts-protests.

In response to the demands of the poor communities in Chiapas, CFE launched "Una Luz Amiga" (A friendly light), a program that provides a discount to 82% of households in the state. Those who consume up to 10 kW/hour have a 50% discount on their bills. Additionally, the government of Chiapas has spent more than 44 million pesos to cover part of the electric energy bill of the users (La Jornada, October 25, 1996, p. 18).

The problems mentioned above have raised angry protests from the local population in Chiapas, forcing authorities to modify some of their operational policies. These measures have not solved the problems, however, so massive demonstrations (65,000 farmers in 1996) have been held regularly. Several resistance organizations integrated by local farmers have been created, supported by researchers, non-governmental organizations and the opposition parties.

Improvement potentials: efficiency and non-conventional energy sources

Non-conventional renewable sources

The high relative cost of renewable energy still hinders its expansion in Mexico. With the exception of large-scale hydroelectric projects, renewable sources are mainly used in small-scale pilot projects. As long as oil is available, the official tendency is to use it on a short-term approach. With longer-term analysis, however, some renewable sources are becoming competitive with conventional ones.

Despite these difficulties, there are outstanding projects based on renewable energies. These projects have even attracted corporate interests. For example, US Amoco in association with Enron, Soldar Power Development, Bechtel and other companies are interested in promoting renewable energy sources in communities that are not on the electricity grid, whose number is estimated between 70,000 and 140,000.

* Solar energy

Mexico is located in a region of the world where the sun has the greatest intensity. For that reason, it has been the site of several solar thermal and photovoltaic studies. In 1991-1994, more than a hundred rural communities were electrified by means of photovoltaic cells, with a power capacity of around 1,500 kW. It is thought that over 50% of the rural communities that are not yet connected to the grid could benefit from these energy sources.

Mexico has installed and estimated 40,000 solar panel systems used for electricity generation (photovoltaic systems), water heating and water pumps. An example is the project Electricidad Rural con Energía Solar (Rural Electricity with Solar Energy). This project was originated in CFE, and is conducted by the Secretariat for Social Development (SEDESOL). It promotes the use of solar energy by means of solar roof collectors for lighting in 10,000 communities in several regions of the country.

At the same time, SEDESOL, with World Bank assistance, is implementing a project to support poor districts. This project—a sort of Social Investment Fund (FIS)—offers a menu of public works that may be carried out with the assistance of SEDESOL and the World Bank. Electricity is one of the prospective services, but it can only be supplied from the electric power grid. Most of the funds for this project are assigned to rural districts, but rural communities are not allowed to choose projects that involve non-traditional electric power supply even though these may be more efficient and cost less.

* Wind energy

Windmills for water pumping are widely used in rural areas, particularly in coastal regions. In the last years the national energy balance reports 330 kW power capacity in air generators and water pumps. The estimated potential for wind power in Mexico is 2,000 MW, 50% of which is concentrated in the Tehuantepec Isthmus.

A CFE pilot wind project in Ventosa, Oaxaca supplies 1.6 MW of electric power. Recent studies reveal that this region has a wind potential of up to 600 MW. Recently, the Danish company Vestas proposed to CFE a wind project of 300 MW in Ventosa. It offered to guarantee the selling price of electricity at US$0.04 per kW/h —the average price for the sector being nearly US$0.06 per kWh—a cost lower than the average 0.06- 0.08/kWh for wind projects worldwide. The CFE said it would accept the project only at 0.02/kWh, an unrealistic price for the Mexican market.

* Solid waste

Solid waste may be used to generate electricity from biogas produced in sanitary back-filling or directly from its burning. The estimate of electricity potential of this sort of technology in Mexico is 300 MW, using garbage from the main big cities. The cost of a plant of this type is double that of a conventional power plant.

* Biomass

Biomass potential has not been quantified. Fuelwood consumption in rural communities and sugar waste in the sugar sector account for 4% of the total energy production.

In sugar mills, existing capacity of power generating facilities using sugar cane waste and oil is nearly 400 MW. Plant factors are estimated at 15-20%, however, since they operate only in the harvest season.

Energy efficiency

With currently available technology, Mexico's energy conservation could reach 20% through simple administrative reforms. The government and some NGOs with small alternative projects are carrying out programs aimed at encouraging energy efficiency and the use of renewable energy sources. Although most of these programs are relatively small, there is technical and institutional capacity to expand them. The economic crisis, combined with a lack of political will, however, has limited the availability of resources for such purposes. If these programs are to have a significant impact at the national level, they must be integrated into general policies and macro-projects in the Mexican energy sector. They are still seen as "pilot projects" or "alternative projects" rather than as part of a global strategy for the energy sector.

Apart from some efficiency and conservation programs promoted by CFE, there are two government-sponsored programs that promote efficient use and rational consumption of energy. One is a private trusteeship established by CFE, and the other is an inter-ministerial agency. These agencies have a high capacity to promote innovative programs at the national level, but their budgets are still relatively limited.

FIDE—The Fideicomiso de Apoyo al Programa de Ahorro de Energía del Sector Eléctrico (Supporting Trusteeship to the Energy Conservation Program of the Electricity Sector)—was established in 1990 by the CFE and the Compañía de Luz y Fuerza del Centro (CLyFC), as a private agency whose aim it is to encourage the efficient use of electricity. In the last seven years, FIDE has assisted some 50 projects in industrial installations and another 85 in commercial enterprises. It has also financed 90 public lighting projects. FIDE facilitates cooperation between public companies, the private sector and trade unions. From 1990-1995, FIDE projects resulted in an estimated 5,400 gWh savings (nearly five percent of the national electricity consumption for that period), reducing the need for new generating capacity by nearly 180 MW. FIDE plans to increase this saving to 12% of national energy demand for the year 2000. According to FIDE, its programs resulted in a reduction of sulfur dioxide, nitrogen oxide and carbon dioxide of over 420 million tons.

The Comisión Nacional para el Ahorro de Energía (National Commission for Energy Conservation–CONAE) is an inter-ministerial agency that coordinates the electricity conservation policies of the federal government. The Commission's initiatives include the design of minimal energy consumption standards for producers. These standards are expected to enable an annual saving of 40,000 gWh by the year 2004, avoiding the need for 2,000 MW of new generation capacity. According to CONAE, the establishment of measures to improve consumption efficiency will enable the conservation of 15% of the energy consumed by the industrial sector, the federal government and public lighting, through measures that make consumption more efficient.

According to the Energy Secretariat, the set of actions to promote energy efficiency will yield 5,513-7,951 gWh/year saving by the year 2000. This would mean a consumption reduction equivalent to 7.3% of domestic sales in 1994.

The energy sector and the Multilateral Development Banks

In the energy sector, the World Bank seems to have played a more significant role than the Inter American Development Bank (IDB) in the last decades. Since the 1980s, both banks have curtailed financing for large infrastructure projects in Mexico. Instead, they have favored sectorial and structural adjustment programs of the Mexican economy and social programs for poverty alleviation.

Although energy is not a priority of the banks, significant resources have been channeled to the sector. The World Bank has provided energy project loans of nearly US$960 million since 1990, while the IDB has financed two projects for a total of US$405 million. It seems that the World Bank sets the priorities for the Mexican energy sector and the IDB follows suit.

Both banks have channeled most of their energy projects (96%) to the electricity subsector, mostly for sector restructuring (including important investments in thermoelectric plant maintenance) and for power generation by thermoelectric and hydroelectric plants. The WB says part of these projects is devoted to demand-side management, but this is restricted to modification of tariff structures.

Both banks say they have no investments in the oil sector, but they have undertaken a counseling role. The WB produced classified documents for the Mexican government suggesting the adoption of certain measures in the oil and natural gas sectors. It has also financed studies undertaken by private consultants for restructuring the sector.

In 1990, the WB proposed the following long-term strategies for its interventions in the Mexican energy sector:

1. To help the country raise foreign currency to finance its investment program in the sector;
2. To promote finance policies that exclude the need of government subsidies and ensure the efficient use of resources;
3. To foster the opening of the procurement process to international competition;
4. To help CFE's attempts of institutional strengthening;
5. To guarantee the consideration of the minimum cost principle in the energy sector program;
6. To strengthen norms and proceedings on environmental and social issues in both construction and operation projects;
7. To promote appropriate policies for the promotion of co-generation and the efficient use of energy.

A review of the Bank's investments in the last decade shows that the first four goals are its real priorities. The achievement of the last three objectives—covering efficiency and social and environment issues—have fallen short or been cut short.

Loans granted in recent years are based mainly on supply considerations, plant maintenance and construction to meet the increasing energy demand. At the same time, in political negotiations the banks are pressing the government to restructure the sector by changing the regulatory system and opening the sector to private investment.

Under the strong influence of the MDBs, the Mexican government has encouraged gradual privatization of the energy sector. The Electricity Law as amended in 1992 enabled private-sector participation in power generation. In December 1994, the World Bank approved a loan earmarked for Technical Assistance for Infrastructure De-incorporation (or privatization).

Within the framework of the technical assistance project, the World Bank insisted that CFE be split according to its three functions (generation, transmission and distribution) as a first step in restructuring, which clearly paves the way for privatization. The World Bank also insists on the need to raise electricity tariffs in order to equate them to long term marginal costs.

Two policies articulated in "The World Bank's Role in the Electric Power Sector" (1992) seem to be the most important for Mexico: the establishment of a transparent regulatory framework and commitment lending. These measures could help the sector operate under strict rules and reduce corruption and project manipulation for political or personal purposes. If this happens, more opportunities could open up for projects based on renewable resources, efficiency and conservation.

Policies stated in "Energy Efficiency and Conservation in the Developing World" (1992) are more innovative, but there is no evidence that they are being implemented in Mexico. One of these policies is that the Bank should include energy efficiency issues in policy dialogue with the government. Judging from the WB's Country Assistance Strategy (CAS) for Mexico in 1996, however, energy efficiency has not been part of policy dialogues with the country. There is one single mention of efficiency and it relates to the need for privatizing the sector and liberalizing tariffs.

The WB promoted establishment of an Energy Regulatory Commission (CRE), which began operation in 1995. Once again according to the Bank, the main reason for regulation is the promotion of private-sector involvement.

The case of Zimapan

In 1989, the World Bank approved a loan project of US$460 million to finance the construction of two hydroelectric stations, Aguamilpa and Zimapan. The former, situated in the western state of Nayarit, with a capacity of 960 MW, has an average annual output of 2,131 gWh. Zimapan, on the border between the states of Hidalgo and Queretaro, has a capacity of 280 MW and an average annual output of 1,292 gWh. Both plants supply energy to the Federal District and its adjoining area. In the initial assessment of the project, the Bank compared the costs of constructing these hydro-plants with those for thermal power plants and concluded that the latter would cost 41% more than the former. It seems no other alternatives were considered.

These projects were given considerable attention as they both resulted in the resettlement of more than 3,500 people, many of whom live in indigenous communities (Aguamilpa, 1,000; Zimapan, approx. 2,500). CFE, under the pressure from the new policy of participation (1990), created a Social Development Management Division. For the first time it negotiated resettlement agreements with the affected peasants, which implied a new degree of participation of affected populations.

Peasants protested in Zimapan, partly because of inevitable conflicts that arise in complex cases where several displaced communities have to be resettled and also because, at the end of the process, four of the ranches bought for resettlement were unacceptable because they lacked fertile soils to farm. After three years of negotiation, the residents signed an agreement that included payment of the commercial value of the proposed farms, and moved to a new place on the same common land.

Three years after the resettlement, Richard Clifford from the WB said in reference to project at Zimapan "...all resettlement problems have been solved." His only concern was that "costs were too high", referring to both resettlement and dam costs. A visit to one of the communities (Rancho Nuevo, Queretaro), however, showed that resettlement problems had not yet been settled, at least for the affected residents. The WB considers Zimapan an exemplary case of how the participation of affected people resulted in fairer planning of resettlement. According to several resettled residents, however, the Bank left them worse off since it did not emphasize restitution of farmland.

With little chance of earning a living in their new community, many residents moved to the US and send money back to their families: 504 out of 3,500 people went to work to the US in 1996, most of them in agriculture. For the time being, immigration is a survival strategy, but new US anti-immigration measures will pose serious problems for many Mexican immigrants from Zimapan.

Since the CFE did not provide with viable farmland or irrigation in exchange for what they had lost, most of the peasants displaced by Zimapan had no other option than to accept the checks CFE offered as restitution. Although the Bank imposed participatory mechanisms, the unequal power relations, lack of political will at CFE, and strong local interests rendered the WB's involuntary resettlement regulations inoperative.

For the World Bank, this project is a past issue. But the Bank's responsibility toward the affected population should outlast the construction stage. It should include follow-up to guarantee that the residents are better-off after resettlement. In this case, the WB seems to have washed its hands of its responsibility by granting checks and new houses.

Mexican Energy Sector

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