Since 2015, E3G has worked with the Mexican government to assist them in strategically thinking through how to finance their commitments under the Paris Agreement on Climate Change.
A critical component of our work is bringing key public and private sector actors together to discuss partnership approaches. Since the beginning of our work in Mexico, this was done by building bridges between Mexico's finance and climate policy communities to better understand each other's needs.
Our aim was to help align previously siloed debates into a single “big conversation” and gauge interest in working together to develop a National Climate Finance Strategy (NFS) for Mexico to finance its nationally determined contribution (NDC).
The work was undertaken in collaboration with the institutions responsible for developing Mexico’s intended nationally determined contributions (INDCs). These included The National Institute of Ecology and Climate Change (INECC) and the Ministry of Environment (SEMARNAT). Several Government Ministries were also involved, including the Ministry of Finance and Energy.
The work involved conducting interviews with 25 key stakeholders ranging from public sector ministries, national funds, development banks, multilateral development banks (MDBs), commercial banks and investors, project developers and trade associations, and international cooperation and civil society organisations. This one-to-one engagement helped us better understand the challenges public and private actors face with financing the low carbon projects aligned with Mexico’s INDC. Particular emphasis was put on solar energy, given the vast availability of the resource and limited penetration in the energy mix.
There was a strong focus on facilitating knowledge-sharing between the UK and Mexican institutions. E3G organised a mission to the UK for key Mexican stakeholders including the director generals of Mexico’s wind, solar, and energy associations as well as representatives from INECC, the Ministry of Energy and the national public bank (NAFIN). The purpose was to help them learn what the UK has done well – and not so well – to facilitate its own low carbon transition. There was a particular focus on the roles of the Committee for Climate Change, the Green Investment Bank and Infrastructure UK.
The early findings of the project were presented by the Head of INECC, Undersecretary for Environmental Policy and Planning at SEMARNAT and the Chief Financial Officer of NAFIN at the Paris COP 21.
The project culminated in March 2016 in Mexico's first high-level dialogue on delivering a National Financing Strategy to meet Mexico's climate change commitments under its NDC. The Treasury (Hacienda), energy ministries (SEMARNAT and SENER), INECC, NAFIN, Inter-American Development Bank, IFC, commercial banks and investors, project developers and trade associations, and international cooperation and civil society organisations all attended.
Stakeholders expressed their wish to continue working together with E3G on this agenda, and work together towards implementation of a National Financing Strategy. The strategy focuses on the following three key areas E3G identified as critical in the development of this work.
- Delivering green infrastructure opportunities at both the federal and city levels;
- Developing a strategic approach to creating the institutional capacity to identify and finance transformational projects. For example, the potential role of a Green Investment Bank model;
- Working out how to use technical assistance resources more efficiently.