The World Bank has approved a $1.5 billion loan for Mexico that will enable the South American nation to develop and implement policies in support of green energy investment through a national stimulus.

The green growth program will help Mexico further develop the regulatory, monitoring and financial framework to transform urban transport and energy into low-emissions sectors.

The policy loan, which is payable in 17 years, will support the government’s Special Climate Change Program which promotes investment in infrastructure backed by government policies to ensure sustainable growth.

The loan will address three policy areas: policy framework for sectoral emission reductions; enabling and monitoring the framework for emission reduction in urban transport and energy; and the set-up of financial mechanisms to facilitate the emission reduction schemes.

The policies are expected to be finalized by May 2011. Technical assistance in establishing or implementing the policies will also be given by the World Bank.

Mexico’s economy, which was not spared from the global financial crisis, is expected to be fired up by the loan – a short-term goal of the project. An improved and sustainable urban mobility, along with energy efficiency, are its medium-term goals.

"We recognize and value that even in the face of a difficult global economic situation the government set its efforts to reduce emissions in the long term and to reach sustainable growth,” said Gloria Grandolini, World Bank country director for Mexico and Colombia.

“Besides having ratified the United Nations’ Framework Convention on Climate Change and the Kyoto Protocol, our country is one of the first developing countries to commit to a specific reduction of emissions through the use of clean and efficient energies,” stressed Juan Rafael Elvira Quezada, Mexico’s environment and natural resources secretary.

Mexico is aims to source 26 percent of its energy from renewables by 2012. Just last month, Mexico joined the International Renewable Energy Agency, further indicating its commitment to green energy development.

-   Jen Balboa