The project is a multi-year proposal submitted in collaboration with Mexico’s NDA (Ministry of Finance) to support the accreditation of two new Direct Access Entities (DAEs)—FIRA (under the PSAA modality) and NADBank—, develop inputs for a national carbon policy, and catalyze private investments at the subnational level through climate-smart PPPs and thematic bonds. This concept is aligned with GGGI’s Strategy 2030 and Mexico’s Country Planning Framework 2021–2025, particularly in the areas of waste, climate finance, and climate action.

The project supports Mexico in enhancing its capacity, as well as the systems of subnational states and financial intermediaries, to access climate finance. It strengthens policy frameworks to promote transparency and low-emission investments, supports the design of robust climate projects, and improves the enabling environment for private sector investment. These actions align with four key objectives of the GCF’s Readiness Programme:

1.Capacity building

2.Strategic frameworks

3.Pipeline development

4.Knowledge sharing and learning

Mexico faces significant challenges in mobilizing additional national and international climate finance, as well as private investments, for the implementation of its Nationally Determined Contribution (NDC) and low-carbon development goals.

Through this project, GGGI addresses several key barriers: the limited availability of concessional finance for climate-resilient, low-carbon projects in the rural sector; insufficient financial flows for the water, sanitation, and waste sectors in northern Mexico; gaps at the subnational level in accessing and implementing climate finance; weaknesses within Mexico’s carbon and green finance systems; and limited capacity to integrate environmental and social considerations into PPP processes.