Don't Buy the Land for Your Mexican Plant Yet. Lock the Site Until the Grid and the Water Say Yes.
Mexico's grid studies a site, not a deed, and moving it costs a new study. Water rights no longer pass with the land. How to tie up a site without buying it.
By Georgina Hernández Valencia · GP&H Legal
In short
Neither before nor after: in between, with a contract that ties up the site without buying it. Mexico's grid does not require you to own the land to study your connection, but it does require a defined site, with coordinates and a polygon. If you move the site later, the interconnection Manual treats it as a Technical Modification: the study is redone and paid for again. And once CENACE instructs the signing of the connection contract, nothing can be changed.
Water raises a different problem. Since the December 2025 reform, the water rights attached to a property no longer pass with the sale: they are reassigned by the authority under the new Article 37 BIS 1 of the National Waters Law. Land with a well no longer guarantees the well's water.
The practical answer: choose the site, sign a promise or option to purchase subject to measurable conditions, file the studies on that site, and close the purchase once the results are in. This guide explains what each authority asks about the land, when it asks, and how to draft those conditions.
1. Why the question is a trap
A buyer who purchases first and studies later may end up with land the grid cannot reach on the schedule or at the cost the project can bear. A buyer who studies first without tying up the land may lose it, and the study with it, because the study is tied to the location.
The study belongs to the site, not the project. For the Impact Study of a Load Center, the 2018 Manual requires a geographic diagram with the location and geodetic coordinates (Table 6) and a KMZ file with the polygon of the Load Center, its connection lines to the grid and the physical location of its substation (Annex IV, section IV.9.1). Power plants must provide the same (Tables 3 to 5).
Moving the site costs a study. The Manual defines as a Technical Modification, among others, "the change in the location of the Power Plant or Load Center" and a change of the connection point (section 1.5.62). If it is notified during the Impact or Facilities Study, CENACE finishes the study in progress and takes the change into account in a new Impact Study (section 6.1.3), charged separately (section 11.1.2).
After the contract instruction, no change is possible. "The Applicant may not make any Technical Modification or Non-Technical Modification once CENACE has instructed the signing of the Contract" (section 6.1.5).
The Manual was issued under the previous law. It still applies insofar as it does not conflict with the Electricity Sector Law and its Regulation, until the provisions replacing it are issued (Fourth Transitory Article of the Regulation, Official Gazette of 3 October 2025). Our guide on energizing a plant explains this.
2. What the grid asks about the land, and when
| Stage | What is required regarding the land | Source |
| Application and Impact Study | Location with coordinates and KMZ polygon. No title required | 2018 Manual, Tables 3 to 6 and Annex IV |
| Change of site before the contract instruction | Technical Modification: new Impact Study, at a cost | Manual, sections 1.5.62, 6.1.3 and 11.1.2 |
| Instruction to sign the contract | No changes allowed | Manual, section 6.1.5 |
| Request for the connection contract | Documents evidencing "lawful possession or control, co-ownership, ownership of the property" or, failing that, a statement under oath that it will be obtained within the project's development timeline | Manual, section 12.1.3(j) |
| Generation or storage permit, if any | "Evidence the ownership, lawful possession, use or enjoyment of the property" | Electricity Sector Law Regulation, Article 23(IV) |
| Social Impact Assessment, if applicable | Its approval lapses with a change of location that identifies new localities or communities, and it is required before construction starts | Electricity Sector Law Regulation, Articles 202(I) and 205 |
What the table says: the grid needs a site from day one, but it does not need a deed until the contract, and even then the Manual accepts a statement under oath accompanied by the possession documents. The generation permit does require evidence regarding the property when filed.
What the table does not settle: the Manual does not say whether a promise or option agreement counts as "control" of the property for item (j). We are not aware of a published criterion on this. That is why the contract with the seller should expressly provide for the seller's cooperation at that stage (section 5).
How long the site must be tied up. For a Load Center, the Manual provides that the application be handled in no more than 170 business days (section 13.2.2), and our guide on energizing a plant breaks that down step by step. One hundred seventy business days are about eight calendar months (170 divided by 5 business days a week gives 34 weeks, plus non-business days). This is approximate; check it against CENACE's calendar of non-business days. It is a maximum handling period for the authority, not a promise of a result, and it does not include the applicant's own time to complete information.
3. Water: three sources, three different risks
The industrial park or the water utility
Most manufacturing plants take water from the park's network or the municipal water utility. The feasibility letter they issue is governed by local state and municipal law, and its content varies. What matters is not that the letter exists but what it says: committed volume or flow, how long the feasibility is valid, works to be built by the applicant and their cost, and conditions for connection. A letter without a volume or a validity period is useless as a closing condition.
Land that already has a well and a concession
This is the source that changed. The decree of 11 December 2025 repealed Articles 33 to 37 of the National Waters Law, which governed the transfer of concession titles, and amended Article 22 provides that rights arising from the transfer of ownership, mergers and spin-offs of companies, and inheritance "shall be reassigned in accordance with Article 37 BIS 1".
In practical terms: buying the land does not transfer the water. The authority must reassign it to the new holder. The transitional regime confirms that transfers are already governed by the new rules, even though the former rules still apply to almost everything else (Second Transitory Article), and the reassignment mechanism has been applicable since 9 June 2026.
What is not settled is the practice: how it is processed, how long it takes and on what criteria it is decided. Until it is, land should not be valued as if the water came with it. If the price includes the well, the reassignment must be a closing condition, or the price must separate the land from the water.
A new concession
If the plant needs its own concession, the prior question is whether water is available in the aquifer or basin. That is checked before choosing the site, not after. Our guide on the water reform explains why the authority's criteria for deciding still have no published content.
4. What belongs neither to the grid nor to water, but decides the site
Land use. It is authorised by municipalities, which have the power to "authorise, control and oversee the use of land" (Article 115(V)(d) of the Mexican Constitution). Compatibility of the zoning with the plant's process is another condition that must be evidenced before closing.
The land regime. Land of ejido origin that has not completed its conversion to full private ownership cannot be safely acquired by a company. Our industrial real estate guide covers title review.
5. How to sign without buying
The Federal Civil Code allows a party to assume "the obligation to enter into a future contract" (Article 2243). The promise may be unilateral or bilateral (Article 2244) and, to be valid, "must be in writing, contain the characteristic elements of the definitive contract and be limited to a certain time" (Article 2246). Real estate sales are governed by the civil code of the state where the land is located; the articles cited are the model most states follow, and they must be checked against the local code.
The obligation to buy may be subject to a condition precedent: one "on whose fulfilment the existence of the obligation depends" (Article 1939). There is a limit worth keeping in mind when drafting: "when fulfilment of the condition depends on the sole will of the obligor, the conditional obligation shall be void" (Article 1944). A condition such as "if the buyer is satisfied with the feasibility" runs that risk. Conditions must be verifiable facts.
Conditions we propose, all measurable:
| # | Condition | How it is evidenced |
| 1 | A CENACE Impact or Facilities Study with connection and reinforcement works whose cost and timeline do not exceed a threshold set in the contract | The notified study |
| 2 | Written water feasibility, with a minimum volume or flow and a validity period | The letter from the park or water utility |
| 3 | If the price includes a well: a reassignment decision in favour of the buyer | The authority's decision |
| 4 | Land use compatible with the process | The municipal licence or certificate |
| 5 | Title free of pending agrarian regime issues and encumbrances | Title review and registry certificates |
And four clauses that should not be missing:
- A fixed term, measured against the authority. The promise must cover the Manual's 170 business days, plus the buyer's own time, plus a margin. If an extension is provided, it should be for a set number of periods and not automatic and indefinite: Article 2246 requires the promise to be limited to a certain time.
- Access to the property for surveys, soil studies and whatever CENACE requires.
- Seller cooperation to deliver the possession or control documents required at the connection contract stage (section 12.1.3(j) of the Manual) and, if there is generation, for the permit (Article 23(IV) of the Regulation).
- What happens to the deposit if a condition is not met: returned, forfeited or split. It is the most negotiated clause and the most forgotten one.
6. The sequence we recommend
| # | Step | Why in that order |
| 1 | Shortlist two or three sites and check water availability and land use for each | They are the cheapest filters |
| 2 | Sign a promise or option on the preferred site, with the conditions in section 5 | It ties up the site that will be studied |
| 3 | File the application with CENACE using full-operation load and the final polygon | Changing later costs a new study |
| 4 | In parallel, obtain the water feasibility and, if applicable, the well's reassignment | They run on their own clock |
| 5 | Close the purchase once the conditions are met, before requesting the connection contract instruction | The contract requires evidence regarding the property and allows no further changes |
What remains open
The replacement for the 2018 Manual. If the way to evidence the property or the treatment of site changes is modified, sections 1 and 2 change.
Water reassignment practice. Article 37 BIS 1 is applicable, but the authority's criteria and timelines are not settled. We will update this guide when they are.
Companion analysis
Sources: Political Constitution of the United Mexican States, Article 115(V); Regulation of the Electricity Sector Law, Official Gazette of the Federation, 3 October 2025, Articles 23, 202 and 205, and Fourth Transitory Article; Manual for the Interconnection of Power Plants and Connection of Load Centers, Official Gazette of the Federation, 9 February 2018, sections 1.5.62, 6.1.3, 6.1.5, 11.1.2, 12.1.3 and 13.2.2, Tables 3 to 6 and Annex IV; Decree issuing the General Water Law and amending, adding and repealing various provisions of the National Waters Law, Official Gazette of the Federation, 11 December 2025, Articles 22, 33 to 37 and 37 BIS 1 of the National Waters Law, and transitory articles; Federal Civil Code, Articles 1939, 1944 and 2243 to 2246. English renderings of Spanish legal text are ours; the Spanish original governs. Information cut-off: 3 October 2026, the date on which the text was verified. GP&H Legal advises international operators on establishing and running industrial facilities in Mexico, with a focus on the energy and water permits that determine whether a plant can operate. This note is general information, does not constitute legal advice on a specific matter and does not create an attorney-client relationship.
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