The second largest economy in Latin America, Mexico is strongly committed to the fight against climate change, environmental protection and the energy transition. Its objective is to halve its greenhouse gas emissions by 2050. The country is also rethinking its growth with the aim of making it more inclusive. AFD has been supporting Mexico in these efforts since 2009.
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Mexico, the second largest economy in Latin America
AFD and Mexico: Low-carbon, resilient and inclusive trajectory a priority

Helping to build the low-carbon trajectory

Young farmer in Xochimilco, Mexico

Helping to build the low-carbon trajectory

In Mexico, all AFD’s financing is consistent with low-carbon and resilient development and 90% of projects have climate co-benefits for mitigation or adaptation. AFD helps several ministries and specialized agencies clarify and implement public polices related to the fight against climate change and the protection of the environment.

For example, it is helping the Ministry of Finance develop and strengthen legislative, regulatory and institutional measures to align public and private financial flows with Mexico’s objectives for the Paris Agreement and sustainable development.

It is assisting its Mexican partners with the implementation of the Escazú Agreement, the first environmental treaty in Latin America and the Caribbean. The objective is to strengthen environmental law and ensure access to environmental and climate justice for all.

AFD is also assisting the Ministry of the Environment with the preparation of the national circular economy strategy and is helping five municipalities in the State of Oaxaca come up with solutions to reduce their climate vulnerability over the long term.

Protecting natural resources

In Mexico, farmers in Yucatán. REDD+ reforestation mechanism

Protecting natural resources

Mexico is one of the richest countries on the planet in terms of biodiversity. However, this natural heritage is now threatened. AFD has been working with the Government and local authorities for 12 years to define innovative biodiversity protection models. Two public policy loans have been implemented to strengthen Mexico’s policy to support natural protected areas (Biomex) and assist the development of a national policy for ecological connectivity (Bioconnect).

Aware of the fragility and importance of marine resources, AFD is also assisting the Government of Mexico with the preparation of pilot projects to protect marine biodiversity and promote sustainable fishing. In addition, with the NGO COBI, it is financing a blue innovation project in the Gulf of California region.

In a context where extensive agriculture causes serious soil degradation and contributes to deforestation, AFD is also helping to build a resilient and inclusive agricultural model. This involves close cooperation with the rural development bank FIRA. In addition, AFD is working with the FMCN (Fondo Mexicano para la Conservación) to finance more sustainable and economically viable “regenerative livestock farming” projects in four Mexican States.

Furthermore, through financing from the French Facility for Global Environment (FFEM), AFD is working with the City of Mexico to preserve the ecological area of Xochimilco. This area was listed as a World Heritage site in 1987 for its agriculture system, which is unique in the world, and the wealth of its biodiversity.

Supporting the energy transition

A hydroelectric power plant in Mexico

Supporting the energy transition

The support for this transition is a strong focus of AFD’s action. Since 2011, it has had a special partnership with the Federal Electricity Commission (CFE), which  has been allocated four successive loans to improve energy efficiency and increase the use of renewable energies, in particular by upgrading its hydro power plants.

AFD has also assisted the implementation of the country’s energy reform via two public policy loans to the Ministry of Energy (SENER). The objective is to reduce the cost of electricity and the carbon footprint of the sector.

Promoting inclusive growth

woman domestic worker in Mexico

Promoting inclusive growth

AFD pays particular attention to social inclusion in the projects it finances. Its aim is to reduce social inequalities and improve gender mainstreaming. It also supports projects directly related to access to infrastructure and social services.

For example, AFD is supporting a project of the Ministry of Labor to formalize and professionalize the person-to-person service sector, which remains very weak in Mexico, and especially improve working conditions for domestic workers.

With support from AP-HP International, AFD has also launched a technical cooperation program to set up a sustainable hospital management system at the Instituto Mexicano de Seguridad Social (IMSS).

billion committed in 14 years
projects financed by AFD
of projects have climate co-benefits

Mexico is the second largest economy in Latin America. With a population of more than 120 million people, it is a modern and young country with an open economy, especially towards its American neighbor. With more than 10% of global biodiversity, it is also one of the world’s megadiverse countries.

However, the country’s rapid economic growth has alarming consequences on the environment. The flexibility of the labor market holds back its formalization and excludes a section of the population from access to social protection systems. Almost half the population is affected by violence and poverty.

Since 2009, AFD has been assisting the country with the development of a low-carbon and resilient trajectory. It is helping the federal Government and federal States build a development that benefits the population, in particular the most vulnerable groups. AFD operates through public policy loans to the Mexican State, credit lines to development banks and technical cooperation programs.

The AFD Mexico office is attached to the Central America Regional Division.

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