Galicia is a leading law firm in Mexico for project financing, routinely playing a key role in energy, transport and urban infrastructure transactions as advisors to sponsors and lenders alike. Over the past year, the firm has been among the most active of its peers in Mexico’s project finance arena.
“Other firms can put together deals, but what differentiates us is our regulatory expertise and being able to defend a client if anything arises during the deal. Providing legal advice, but also knowing how to defend it, has been a game-changer for us,” says Christian Lippert, one of Galicia’s 37 partners.
It advised on the financing for the upgrade of Line 1 of Mexico City’s subway, which won the award for Infrastructure Financing of the Year - Mexico. The project faced numerous challenges, especially in the structuring phase and during early negotiations, as it was Chinese sponsor CRRC’s first venture in Mexico. As sponsor’s counsel, Galicia played a critical role in guiding the company – with entities in China and Hong Kong – not only through the complexities of local law but also through the negotiation of financing documents with five different financial institutions.
In another landmark deal in 2022, it advised France’s Vinci on its acquisition of a stake in Mexican airport operator OMA for $1.117 billion in one of last year’s most important transactions. The deal made Vinci Airports the largest shareholder in OMA, which will operate 13 airports in Mexico through 2048.
It also advised Santander in the bank’s role last year as structuring agent and underwriter in its financing of the Nuevo-Necaxa-Tihuatlan toll road, located between the states of Puebla and Veracruz. The deal represented one of the first securitizations of toll roads in Mexico in several years.
Beyond traditional infrastructure projects, the firm is gearing up for a surge in activity as the full impact of nearshoring in the north of Mexico plays out. Earlier this year, Mexico displaced China as top trading partner to the US, with the two countries exchanging more than $260 billion in the first four months of 2023.The shift did not go unnoticed by partners at Galicia, which moved quickly to open an office in Monterrey, in the state of Nuevo León, and adding attorneys to its already strong practice.
“If nearshoring arrives the way we all think it will, we believe that we have the ideal strategy,” says Lippert. “We have opened an office in Monterrey and strengthened our office in Mexico with more attorneys in key areas, such labor, environment, financial, which will be key for the nearshoring process.”
Lippert says the secret to the firm’s success was a decision to focus on three pillars that underpin all its work – transactions, regulatory know-how and litigation. In other words, Galicia knows how to structure a deal, can expertly navigate rules and regulations, and, if needed, litigate on behalf of its clients.
In addition to extending its physical reach to the Mexico-US border, Galicia is also honing its expertise in strategic sectors, including fintech, that will also see growth as the economy changes.
As for the infrastructure sector, the market is anxiously awaiting next June’s general election, which is widely expected to herald a less hostile environment for private capital – no matter the outcome.