Developer or project seller: the difference that defines your investment

Anyone looking to invest in Mexican energy eventually gets the same call: “I have a 30 MW solar project, with land and permits, ready for you.” Behind that sentence there can be two very different people. One is a developer: someone who has put their own money and several years into turning a piece of land into a project that can be built. The other is a project seller: someone with access to a folder who gets paid if the folder changes hands.

Both trades are legitimate. The problem starts when they are confused, because the investor ends up paying a development premium for brokerage work, and finds out later that the risk they thought they had bought is still open.

What a developer does

Development is the stage between the idea and the notice to proceed. It is the cheapest stage in money and the most expensive in risk: most projects that start never get built. The developer is the one who funds that stage and absorbs the losses on the projects that fall away.

The job is to close, one by one, the risks that stand in the way of construction:

1. Land. A signed lease or purchase, with title reviewed and no agrarian disputes or easements in the way.
2. Resource and design. Resource measurements or data, basic engineering and a production estimate that holds up in front of a third party.
3. Interconnection. An application with CENACE, interconnection studies and a connection point with real capacity on the grid. In Mexico today, this is the milestone that creates the most value and takes the most time.
4. Permits. A generation permit from the National Energy Commission (CNE) where required, an environmental impact statement, a social impact assessment, land-use approval and municipal licences.
5. Offtaker. A contract or, at least, a credible route to sell the energy: self-supply, a supplier, CFE or the market.
6. Cost and financing. A quoted construction budget, an identified contractor and a financial model a bank can review.

When those six fronts are closed, the project is ready to build. That is the developer’s product, and its price reflects the years and the risk capital it took to get there.

What a project seller does

The seller does not develop: they connect. They know someone with land, an old permit or a study, and they know someone with capital. Their income is a commission or a mark-up at signing, and their relationship with the project usually ends there.

A good intermediary saves time and opens doors. But they do not take development risk, they do not answer for what is missing and, in general, they do not have the full picture: they sell what they were given to sell.

The difference in one table

	Developer	Project seller
Own capital in the project	Yes, at risk from the start	Rarely
How they earn	Project value as milestones are reached	Commission or mark-up at signing
Relationship after the sale	Often stays (equity, operations, guarantees)	Ends with the transaction
What they deliver	Verifiable milestones	A folder
Who absorbs a project that fails	They do	The buyer
Knowledge of the grid and the authorities	Direct, first-hand	Second-hand

Why it matters more in Mexico now

The Electricity Sector Law, published on 18 March 2025, and its regulations, issued on 3 October 2025, changed the rules of entry. In October the National Energy Commission issued new provisions for generation and storage permits, and grid expansion is now subject to binding planning.

That has two consequences for investors. First, plenty of paperwork from the previous regime is in circulation — permits, interconnection contracts, studies — whose value depends on whether it is still valid and enforceable under the new rules. A permit is not a project. Second, the bottleneck has moved from paperwork to the grid. A project without confirmed interconnection capacity is worth little, however good the land and the resource. Both effects favour whoever works the project first-hand and penalise whoever only resells it.

Seven questions before signing

1. How much of your own capital is in the project, and since when? A developer answers with figures and dates.
2. Who holds each document? Land, permits and interconnection applications should be in the name of the project company, not third parties.
3. Where does interconnection stand? Ask for the application number, the studies issued by CENACE and the dates.
4. Which permits remain valid under the 2025 law? And which have to be applied for again.
5. What is missing to be ready to build, and what will it cost to close? A vague answer is itself information.
6. What happens to you after the sale? A minority stake, a milestone-based development agreement, guarantees: a developer usually has something to lose.
7. Who else has seen this project? An asset that has passed through many hands without closing usually has a flaw nobody has mentioned.

Red flags

• The price is quoted per MW without distinguishing what stage each milestone is at.
• The folder is thick, but the key documents are copies, expired or in someone else’s name.
• There is no direct access to the landowner or the technical team.
• Exclusivity is offered in exchange for a non-refundable deposit.
• The pitch is about the resource (“the best irradiation in the state”), not the grid.

The takeaway

First: pay for risk that has been closed, not for paper. A project’s value grows by milestones. Structuring the purchase with payments against verifiable milestones — confirmed interconnection, transferred permits, a signed offtake contract — aligns the seller with the outcome, whoever they are.

Second: intermediaries have their place, at an intermediary’s price. A transparent fee for originating an opportunity is reasonable. A development premium for an unverified folder is not.

Third: under the new regime, the advantage is local and technical. Knowing the grid, the authorities and the territory is what turns land into a project. That is the practical definition of a developer.

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Sources: Norton Rose Fulbright — New electricity sector laws issued in Mexico (Mar-2025, in Spanish) · DOF 03-10-2025 — Regulations of the Electricity Sector Law · DOF 23-10-2025 — CNE provisions on generation and storage permits