Mexico will boost renewable energy with help from the IDB
11/30/2012 Since 8 years

Package of up to $210 million from the IDB, Clean Technology Fund and Mexico’s Nacional Financiera aims to mobilize more than $1.5 billion for renewable energy projects

The Inter-American Development Bank (IDB) approved a concessional loan for $70 million to boost funding for renewable energies in electricity generation in Mexico, thereby reducing greenhouse gas emissions.

The resources, which were provided from the Clean Technology Fund, will mobilize at least the same amount of funding from Mexico’s development bank, Nacional Financiera (NAFIN), along with $70 million from an existing IDB conditional line of credit approved in 2009, for a total of at least $210 million.

The Clean Technology Fund (CTF), one of two climate investment funds for which the IDB serves as an implementing agency, promotes funding for the demonstration, implementation, and transfer of low-carbon technologies with a long-term potential for significant reductions in greenhouse gases. The CTF finances programs in 12 countries around the world.

“We hope to generate a demonstration effect that will induce other Mexican financial institutions to participate in these types of projects,” said Ramon Guzman, IDB project team leader.”The program will provide direct loans to entities that promote projects for renewable energy generation, as well as credit lines to cover any cash flow deficits.”

The aim of the operation is to mobilize more than $1.5 billion in additional financing from institutions other than the IDB and NAFIN. This would eventually enable project sponsors to build renewable energy plants with a total cost of around $2.5 billion.

These funds are expected to be used for the construction of at least 10 renewable energy facilities, in particular wind power plants and small hydroelectric plants, for a total increase in Mexico’s installed generating capacity from clean sources of 1,000 megawatts. The estimated savings of greenhouse gas emissions in this scenario would total two million tons of CO2 yearly .

The IDB loan is for a 20 year-term, with a grace period of 10 years, and a reduced interest rate.

This post is also available in: Spanish

Asset owners set and commit to report on 2025 targets to support 2050 net-zero emissions
Thirty-three of the world’s largest investors have committed to setting and reporting on 2025 targets to support the transition to net-zero greenhouse gas emissions by 2050. The final Net-Zero Asset Owner Alliance’s I...
Since 1 week Read More
Chile’s Energy Efficiency Law was approved
The Energy Efficiency Law aims to make rational and efficient use of resources. It covers the three sectors that account for most of the country's energy consumption: transport (37%); industry and mining (40%) and the...
Since 2 weeks Read More
With support from the IDB Group, BDMG makes its debut on the international sustainable securities market
IDB Invest, a member of the IDB Group, announced the acquisition of a seven-year $50 million sustainable bond issued by Banco de Desenvolvimento de Minas Gerais S.A. (BDMG). The operation consolidates BDMG as the firs...
Since 4 weeks Read More