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Refinery may get part of $10 B U.S. financing aid

Part of a $10 billion investment in aid and loans pledged by the United States for Mexico and Central America could go to Mexican infrastructure projects including a new oil refinery, a senior Mexican official said.

Mexican President Andres Manuel Lopez Obrador said on Wednesday that the funding, which he discussed with White House senior adviser Jared Kushner this week, would seek to mitigate the causes of migration in Central America and Mexico by generating more jobs.

Most of the funds, at least in a first stage, would go to projects in Mexico because its plans are more developed than those in Central America, said Jesus Seade, the undersecretary for North America in Mexico’s Foreign Ministry.

In December, Washington committed $5.8 billion to development in Central America, while increasing public and private investment in Mexico via the Overseas Private Investment Corp (OPIC) by $4.8 billion.

On Wednesday, Lopez Obrador talked about $10 billion.

OPIC is a U.S. government agency that aids infrastructure projects in developing countries. Mexican officials are also aiming to secure private funding for the refinery.

“With OPIC, we’ve progressed a lot in finding ways for them to participate in specific areas of President Lopez Obrador’s flagship projects... (including) the refinery,” Seade said.

OPIC did not immediately respond to a request for comment.

Lopez Obrador has gone out of his way to build a good relationship with U.S. President Donald Trump, and the deal was widely seen as quid pro quo for an agreement to send some Central American migrants to stay in Mexico while their U.S. asylum claims are processed.

The Mexican government on Monday invited several companies, including American firms, to bid on the $8 billion construction of the new Pemex refinery on Mexico’s southern Gulf Coast.

The decision to build Mexico’s seventh refinery, meant to help wean the country off fuel imports, has been questioned by credit ratings agencies concerned about Pemex’s financial health.

Seade, who helped re-negotiate the North American Free Trade Agreement last year, said the United States had expressed interest in the refinery but that Mexico was still working out how such funds could be used for the project.

He also mentioned a train project in Mexico’s popular tourist area, known as the Mayan Train, development in border areas and a new airport outside Mexico City as possible investment targets.

Seade added that U.S. Trade Representative Robert Lighthizer has expressed willingness to reach a deal over tariffs imposed last year on foreign exporters of steel and aluminum, including Mexico. Mexican officials have called them unfair and want the measures withdrawn.

“I think an agile and rapid resolution is possible. ... It depends on when we decide to follow a certain direction, but yes, it can be resolved in a month, without a doubt,” he said. (Reporting by Sharay Angulo Writing by Daina Beth Solomon Editing by Leslie Adler)

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