Financing for Climate Action in Mexico (FINACC)

Context

Mexico is committed to fighting climate change and meeting its obligations under the Paris Agreement. It aims to reduce greenhouse gas emissions by more than two thirds by the year 2030. In order to achieve this unconditional reduction target by 2030, the country will incur costs estimated at USD 185 billion.

However, Mexico lacks suitable policy frameworks that would enable it to mobilise climate finance. Closing the financing gap requires an appropriate policy, regulatory and tax framework. At the same time, effective and innovative incentive mechanisms are necessary to increase the volume of both public and private finance.

Objective

The regulatory and financial conditions for mobilising climate finance resources in Mexico are improved.

Approach

The project collaborates with the Mexican Ministry of Finance (SHCP), the Central Bank of Mexico (BANXICO), the Mexican Ministry of Environment and Natural Resources (SEMARNAT) and private finance groups. It improves coordination mechanisms with the aim of promoting public-private investment (mixed finance) that is compatible with the national climate action targets.

The technical support focuses on the development, improvement and implementation of regulations in the financial system. This is intended to enable effective climate finance in which the focus is on gender equality and a just transition.

The project operates in three fields of activity:

1. It supports public stakeholders in coordinating and planning climate finance.
2. It creates control mechanisms that enable climate aspects to be incorporated in financing decisions.
3. It improves financial frameworks and qualifications for implementing green mixed finance instruments.

Last update: July 2023