(Bloomberg) -- President-elect Claudia Sheinbaum appointed a close ally to lead the Energy Ministry, which will be key to expand power generation for Mexico’s industrialization push.

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Luz Elena Gonzalez, Mexico City’s former finance chief under Sheinbaum, was part of a second group of cabinet members the president-elect announced on Thursday. They had worked closely together when Sheinbaum was the mayor of the nation’s capital until 2023, a role that helped launch her presidential campaign.

“The first priority will be guaranteeing energy sovereignty,” Gonzalez told local TV outlet Milenio after the announcement. “We are going to advance the energy transition. We are going to guarantee energy security, but it’s necessary to know that the Mexican people are in favor of national sovereignty.”

Gonzalez will face the challenge of increasing generation and transmission in Mexico’s energy sector, where a growing economy and extreme temperatures are pushing power grids to their limits, often sparking widespread blackouts. Mexico’s energy issues have limited its potential for nearshoring, a trend in which many manufacturers want to locate factories closer to the US to reduce their dependence on China.

“They are putting professionals in charge, not ideologues,” said Oscar Ocampo, an energy analyst at the nonprofit Mexican Institute for Competition, or IMCO. “It sends the message that Sheinbaum is in control.”

Close Ally

In her role in Mexico City, Gonzalez oversaw an expansion of the tax base that she credited with the government’s revenue increase despite serving as the city was recovering from pandemic-related problems. Gonzalez previously held roles in transportation and education in city governments, before working for Sheinbaum.

“One of the myths that we have struck down is that there isn’t money,” said Gonzalez in an interview with Bloomberg News in February. “We improved the collection mechanism and we implemented a fiscal program where we gave priority to those who voluntarily met their obligations, expanding the taxpayer base.”

Read the Interview: Mexico City Tax Strategy Could Go National, Sheinbaum Ally Says

Sheinbaum has said she wants to revitalize Petroleos Mexicanos, the troubled state oil company, with a new focus on clean energy by broadening its scope to include technologies such as green hydrogen, lithium extraction and electric-vehicle infrastructure. Her plan would cap Pemex’s oil production in coming years at around 1.8 million barrels a day while the government focuses on sparking growth in green energy.

The incoming president also plans to spend almost $13.6 billion on projects to boost Mexico’s wind and solar generation while still adding gas-burning power plants. She also said she plans to modernize hydroelectric stations and add about 3,850 kilometers (2392 miles) of transmission lines.

That plan represents a shift from the policies of President Andres Manuel Lopez Obrador, who prioritized spending billions to increase Pemex’s oil refining capacity. Sheinbaum has also said she supports focusing on generating enough oil for domestic consumption and limiting exports, as the president had favored.

Gonzalez’s close relationship with Sheinbaum is perceived as a positive sign for the sector, analysts said.

“If personnel is policy, President-elect Sheinbaum is showing that Pemex will have very robust financial oversight, as closely aligned with herself and a reinvigorated Finance Ministry as possible,” said Pablo Zarate, senior managing director at FTI Consulting. “If Sheinbaum combines this with someone that can be credible with Wall Street for CEO of Pemex, you have the makings of a very interesting team — different to what we’ve seen in the past.”

Sheinbaum also named current Economy Minister Raquel Buenrostro as federal comptroller and David Kershenobich as her Health Minister, among other appointments.

--With assistance from Kelsey Butler and Michael O'Boyle.

(Updates with additional details from third paragraph)

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