IDB Provides US$15 Million for Climate Change Mitigation in Mexico
15 November 2012: The Inter-American Development Bank (IDB), as the implementing partner for the Forest Investment Program (FIP), will provide US$15 million in financial and technical assistance to Mexico to mitigate greenhouse gas (GHG) emissions through reducing deforestation in five of the Mexican states with the greatest forest loss.
The program aims to address obstacles that limit access to credit, one of the underlying economic causes of deforestation and degradation, through a dedicated project financing line.
Under the program, the IDB will provide support for projects in forest landscapes that reduce deforestation, promote sustainable forest management and enhance forest carbon stocks while generating economic benefits for local communities. Communities and ejidos (communal agricultural lands) or their members in Campeche, Jalisco, Oaxaca, Quintana Roo and Yucatán states will be eligible to access this project financing, which will amount to US$10 million as a low-interest loan.
In addition, the IDB will provide US$5 million to support financial, management and technical capacity building. This project component aims to build capacity to manage low-carbon strategies at the ejido and community level and to ensure individual project viability.
The program is intended as a pilot to test business models, financial structures and strategies to reduce deforestation and degradation while also providing economic returns. It is anticipated that the lessons learned from FIP application in these five states will be used elsewhere in Mexico. The program will be implemented by Financiera Rural, a Mexican development finance institution specializing in financial and technical services for rural areas will implement the program.
The FIP is a program of the Climate Investment Funds' (CIF) Strategic Climate Fund (SCF). It is designed to support countries to sustainably manage their forests and reduce GHG emissions, deforestation and forest degradation. The FIP is intended as a complement to other international REDD+ programs. The FIP has $639 million contributed by Australia, Denmark, Japan, Norway, Spain, Sweden, UK and US. [IDB Press Release]