MEXICO CITY (Reuters – Mexico’s president’s plan to overhaul the electricity sector in the country is “negative” for Latin America’s sovereign credit rating, Moody’s Investors Service (NYSE:).

According to the rating agency, it was clear that this bill could cause international disputes and hinder foreign investment. This would make the country less competitive in the global market for capital.

Moody’s argued that this initiative is “credit-negative for Mexico’s electricity sector” because it would reduce its transparency, discourage private investment and disincentivize the generation of renewable electricity.

Mexico is at the moment Baa1 in sovereign credit ratings with a poor outlook.

The bill was recently sent to Congress. It envisions that the state will expand its oversight role of the sector, at the expense regulators, and it will limit private sector participation.

The country’s national electricity company, Comision Federal de Electricidad or CFE (the CFE), would provide 54% market supply. Additionally, the Mexican government will be the main player in the industry of lithium and other strategic minerals.