Large Scale Renewable Energy Development Project

In order to reduce GHG emissions while responding to increasing energy demand and energy diversification imperatives, Mexico is exploring a long-term strategy (to be implemented over the next 7-8 years) to accelerate the commercialization of renewable energy technologies, particularly at the grid-connected level. The GOM seeks to directly stimulate renewable energy through a GEF-supported financial mechanism to deliver incentive (tariff) support on a competitively procured basis to jump-start the market, and facilitate these investments through regulatory changes and policy commitments at the national level. The program will develop a continuous stream of investments with a declining level of concessional support over time, and integrate these investments with policy and market recognition of the energy capacity, environmental and diversification value of renewable energy sources at the tariff level. Coupled with significant commercial financing, the expected level of tariff support implies an approximately 10:1 leveraging of GEF funds or higher.