GCF Approves US$164.6 Million for Climate Projects in Mexico

The Green Climate Fund (GCF) approved the financing of two projects aimed at mitigating climate change in Mexico. These projects, which focus on electromobility and watershed restoration, will receive support totaling US$164.6 million, as reported by Mexico’s Ministry of Finance and Public Credit (SHCP).

Gabriel Yorio, Minister of Finance, highlighted that the first project, titled BALSAS, aims to reduce climate change vulnerability in the Balsas watershed, one of the most marginalized areas in the country. This initiative has a budget of US$39.5 million and will be managed by the International Fund for Agricultural Development (IFAD). It is expected to benefit 3 million people and mitigate 3.9Mt of CO2 over 20 years.

In the Balsas watershed, increasingly erratic rainfall and prolonged dry seasons are reducing agricultural productivity and degrading natural resources, leading to more frequent floods, crop damage, and droughts that further reduce crop yields. The project will seek to transform incentives for rural development by emphasizing forest resource conservation and strengthening local institutions and capacities. It will also prioritize bottom-up decision-making and the development of value chains to ensure social inclusion and empowerment of women, youth, and indigenous peoples. These actions are expected to improve the resilience of the most vulnerable rural communities’ livelihoods while helping to conserve the Balsas watershed’s ecosystems.

The second project, E-Motion, aims to promote electromobility and low-carbon transportation in nine Latin American countries, including Mexico. It will receive funding for US$125.1 million and is expected to benefit 9 million people by mitigating 7.5Mt of CO2 over 20 years, improving health and air quality. The accredited entity for this project is the Inter-American Development Bank (IDB).

The Electric Mobility Program for Sustainable Cities in Latin America and the Caribbean, launched in 2022 by IDB and GCF, drives the transition toward more resilient and lower-carbon public transport. It facilitates the adoption of electric vehicles by addressing financial barriers such as high capital investment costs, performance risks, and low profitability. The program finances electric buses, fleets, and boats and supports hydrogen and vehicle-to-grid projects to enhance urban mobility. Additionally, the initiative works to establish electric mobility frameworks, including gender action plans, to promote transformative urban mobility that is resilient to climate change.

During the GCF’S 39th Board Meeting held in July, where the support for the aforementioned projects was granted, 15 other projects in 35 developing countries were also approved, with a landmark approval of US$1 billion in financing. Notably, among the selected projects were three involving first-time Accredited Entities in Tajikistan, Nigeria, and the Ivory Coast. This decision expanded GCF’s portfolio to 270 projects, with an expected total of US$58.7 billion.

The GCF is a fund within the framework of the United Nations Framework Convention on Climate Change (UNFCCC) established as a mechanism to assist developing countries in climate change adaptation practices. The fund aims to mobilize funding at scale to invest in low-emission and climate-resilient development in areas where it is needed most.