At a Glance
|Strategic Outcomes||SO1 Reduced GHG emission, SO6 Enhanced adaptation to climate change|
|Start Date||Q1 Aug 1 2019|
|End Date||q1 Mar 3 2021|
|Actual Budget (USD)||798,000|
|Actual Expenditure (USD)||700000|
|GGGI Share (USD)||0|
|Poverty and Gender Policy Markers||poverty|
|Name of Client (Lead/Prime implementer if GGGI is part of a consortium)||Ministry of Finance (SHCP); BANOBRAS; NAFIN|
|Participating Organization (Funding/donor)||GCF|
|Name of consortium members, if any|
Mexico’s new federal administration (2018-2024) has expressed its intention to further strengthen its climate change framework by refining climate goals, updating its climate change policy and by building institutional capacities to enhance cooperation and unlock green finance. Central to this objective is the development of a Climate Finance Strategy to ensure NDC activities are effectively and efficiently funded, and that public funding leverage significant private resource mobilization. The new government created the Sustainable Finance Directorate within the Ministry of Finance (SHCP), where the Nationally Determined Authority (NDA) before the GCF sits. The NDA coordinates closely with the Secretariat of Environment (SEMARNAT), MoFA, and national development banks (NAFIN, BANOBRAS) to ensure complementarity between international and national green funds and their alignment with the country’s national priorities and commitments.
In 2017, INECC estimated implementation costs related to NDC achievement. Meeting such ambitious climate goals will require doubling Mexico’s current efforts (largely insufficient) to close the investment gap. Among the many funds to this end is the Green Climate Fund (GCF), created to support developing countries to respond to the challenge of climate change. The Fund has a mandate to build countries’ capacity to access funds through its GCF Readiness Programme, which prepares countries to plan for, manage, disburse and monitor climate financing. Improving the Mexico’s access to funds from GCF through the country’s existing development banks can help to de risk climate projects and unlock further private capital to finance NDC implementation.
Readiness support aims to:
1) Foster ownership through a no objection procedure and country program, establishing clear updating mechanisms.
2) Support the Direct Access Entity accreditation process of NAFIN and BANOBRAS. NAFIN is well advanced in the process for accreditation, but support is needed and will be provided to implement environmental and social safeguards and gender standards to meet the GCF accreditation standards. BANOBRAS has yet to formally start GCF accreditation process, but as part of its commitment to support sustainable development it has already initiated the development of ESS standards, and has undertaken activities to introduce gender perspective in its operations, culture, products and services. These need to be reviewed, strengthened and implemented to meet GCF accreditation standards.
3) Develop a national climate finance strategy engaging various stakeholders (e.g. private sector). The NDA and other relevant stakeholders are seeking to develop an effective and efficient climate finance architecture to support NDC implementation. This architecture seeks to make the best use of public and external climate finance sources to unlock private sector finance.
Type of services provided, and results achieved
i. Green Growth Policies:
* Supported the inaugural meeting of the Climate Finance Working Group (GT-FIN) of the Inter Mministerial Climate Change Coordination mechanism (CICC). GT-FIN was created in 2018 but never held a session until 2020 when GGGI developed an Operative Manual for the Group in support of the Ministry of Finance and the NDA (MX07-E1-8).
* Coordinated the launch of a call for climate project concept notes to develop a national pipeline and as inputs for the GCF Country Program. The call gathered interest from subnational, private sector and civil society and 22 concept notes were received. This is rapidly building a pipeline for climate projects (MX07-E1-2).
* Two candidate Direct Access Entities (DAE) seeking GCF accreditation, BANOBRAS and NAFIN, approved and formally launched 3 key policies: Gender and Environmental &Social in the case for BANOBRAS and Environmental & Social in the case for NAFIN (MX07-E1-6 and 7).
ii. Green Investments:N/A
iii. Capacity Building and Knowledge Products:
Number of staff provided
Project Manager: Pablo Martinez
Diana Quezada Avila, Jose Loustaunau, Julie Robles
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