MEXICO CITY, July 22, 2010 — Mexico and the World Bank reinforced their strategic partnership on key development issues, after a two day working visit by World Bank Group (WBG) President Robert B. Zoellick.
After meetings with Mexican President Felipe Calderón and high-ranking officials to review progress in economic, social, climate change, and other development areas, Zoellick announced new Mexican participation in the Forest Investment Program (FIP), a global program that has received $ 542 million in contributions for the reduction of greenhouse gas emissions from deforestation and forest degradation.
Mexico was recently selected as one of eight countries worldwide by the governing body of the FIP to receive substantial financing.
The Mexico-WBG strategic partnership goes beyond traditional lending operations and includes sharing of knowledge and global experience, technical and advisory services, and innovative financial mechanisms to support Mexico’s efforts to overcome poverty. The WBG will deepen its support to Mexico’s already extensive program on climate change, especially in light of the upcoming United Nations Climate Change Conference (UNFCCC) COP16 in Cancun.
Referring to the climate summit, President Zoellick urged countries around the world to work together to make Cancun a success and praised Mexico’s leadership in addressing climate change adaptation and mitigation.
“Mexico, an influential country in the G20, is a major economic player in Latin America and is becoming a leader on climate change. Mexico’s success will certainly have a great impact in the region as a whole,” said Zoellick. “Mexico has implemented a uniquely forward-looking set of green policies and we recognize and value that even in the face of a difficult global economic situation the government is committed to reducing greenhouse gas emissions as it seeks sustainable growth.”
As part of this commitment, Zoellick met with Finance Minister Ernesto Cordero to sign two recently approved ‘green’ loans that will further support Mexico’s efforts to address climate change.
He also met with Energy Minister Georgina Kessel, Foreign Affairs Minister Patricia Espinosa and Environment Minister Juan Rafael Elvira to hear the Mexican perspective on climate change and energy initiatives.
In order to gain additional perspectives on the economic, social and environmental challenges facing Mexico, Zoellick met with representatives of the private sector. He also participated in a public forum with students from the Instituto Tecnológico Autónomo de México (ITAM).
Mexico and the Global Environment
The Bank’s engagement with Mexico on climate change issues dates back to the mid-1990s and today comprises more than 30 active initiatives. As part of the support in this area, the World Bank recently approved a $450 million loan to support the government's efforts to advance its strategy for climate change adaptation in the water sector through strengthening institutions, regulations and monitoring capacity in integrated water resources management. It also approved a $350 million loan to support the improvement of Mexico’s public transportation systems, which includes expanding its service network with little impact on the environment and reduced greenhouse gas emissions. This project includes a $150 million loan from IBRD and a $200 million concessional loan from the Clean Technology Fund (CTF). Both loans aim to support Mexico’s efforts under its Climate Change Special Program (PECC), in particular its voluntary commitments to curb greenhouse gas emissions, and mainstreaming climate change in public policy.
"From south to north, east to west, climate change efforts need to be more inclusive and sustainable,”said Zoellick. “Mexico has shown a clear commitment to sustainable development and has become a key voice in the global efforts on climate change. It has set an example through its commitments to reduce CO2 emissions, and the Bank is proud to be a partner in these efforts.”
Mexico was the first Latin American country to benefit from the Climate Investment Funds (CIF), a unique pair of financing instruments designed to support low-carbon and climate-resilient development through expanded financing channeled through the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, and the WBG.
World Bank Group portfolio in Mexico
Mexico has the second largest World Bank portfolio in Latin America. During FY10 (July 1, 2009 - June 30, 2010) the World Bank approved nine projects for a total of $6.4 billion in key sectors such as health, education, transport, energy, water and economic policies. In addition, during FY10, the WB delivered 14 Analytical and Advisory Activities.
The International Finance Corporation (IFC), the private sector arm of the World Bank Group, is implementing a strategy for Mexico focused on supporting climate change projects through direct investments in companies and financial institutions. IFC also supports inclusive business markets such as microfinance, housing and health and education, and promotes infrastructure development, particularly water and renewable energy. Recently, IFC helped arrange the financing of $375 million for Eurus in Mexico, the largest wind farm in Latin America (250MW). IFC’s total committed investment portfolio in Mexico for FY10 is $1.4 billion, including syndications.
Mexico received a $500 million allocation from the Clean Technology Fund, of which, in addition to the $50 million program for renewable energy projects implemented by IFC, $250 million will support urban transport and energy efficiency projects implemented by the World Bank and $200 million for energy efficiency and renewable energy projects implemented by the Inter-American Development Bank. The Bank is also implementing nine grants from the Global Environmental Facility (GEF) totaling $158 million and $15.6 million in Carbon Fund grants.
