Mexico Aims to Cut Home Energy Use with Green Loan Plan
In the News | Jun 27 2013
Workers build energy-efficient homes in the Hidalgo state capital of Pachuca. Thomson Reuters Foundation/Monica Healy

By Talli Nauman, originally published June 27, 2013 on Thomson Reuters Foundation

MEXICO CITY (Thomson Reuters Foundation) – Since the 1980s, the Mexican government has subsidised massive tract-housing projects around the country, filling them with hundreds of thousands of concrete-block, brick and mortar structures that have no insulation or other comfort control features.

This response to intense pressure for affordable urban housing is to blame for widespread urban sprawl in Mexico over the last 30 years – and increases in climate-changing emissions, experts say. Homes now use 16 percent of the country’s energy and account for 3 percent of direct greenhouse gas emissions, as well as a variety of indirect ones, according to the country’s Social Development Ministry.

That rising urban carbon footprint is one reason the country’s climate change policymakers see cutting residential emissions as essential for reaching Mexico’s 2050 target to cut its greenhouse gas emissions in half from 2002 levels.

To accomplish the needed cut, they have turned to a so-called Eco House programme, which Gisela Campillo Bermudo,  leader of the Inter-American Development Bank’s infrastructure and environment team, says is new in Latin America.


The construction loan program offers buyers of newly built homes increased comfort and energy cost savings – through features such as roof insulation and solar water heating - at the same price they’d pay for conventional shelter. It aims to reduce the housing sector’s greenhouse-gas emissions at least 20 percent by the end of this decade.

The object is “to prompt climate-friendly design, adjusting it to the characteristics of each locale, and develop new construction systems of higher quality and efficiency,” says Mónica Healy Hegewisch, a member of Campillo’s team.

The Eco House program is being financed with up to $150 million in loans including approximately $50 million from the multi donor  Clean Technology Fund (CTF), which aims to help middle-income countries scale up low-carbon  technology. The CTF is one of two Climate Investment Funds  that support developing countries to pilot low-emissions and climate-resilient development projects through multilateral development banks.

Mexico is the first country in the hemisphere to access the CTF via a Nationally Appropriate Mitigation Action for Sustainable Housing - essentially the country’s own plan to reduce carbon emissions from housing.  Mexico’s decision to focus on reducing housing emissions reflects findings that investments in domestic energy efficiency are more cost-effective than other alternatives for reducing greenhouse gas.

The financing deal creates a revolving fund, which can create $350 million in generous cut-rate loans to builders over the next seven years. It makes Mexico a leader in testing new climate-linked lending models now being used by the World Bank and its international partners.

The money is expected to filter down to contractors in equal shares from the German Economic Development Bank KfW, the Inter-American Development Bank, and the Mexican Development Bank’s Federal Mortgage Society.

All borrowers have to do, to start, is make sure they fit new homes they build with previously overlooked items such as roof and wall insulation, double-pane windows, solar water heating and state-of-the-art refrigerators.

 All the buyers have to do is select the home sites they want, draw up the paperwork, and move in.


The program goes a step further than what Campillo calls the “well-known and successful” Green Mortgage program, in which the government helped some 900,000 people take out mortgages to buy energy-efficient homes from 2007 to 2012, through the National Housing Fund for private sector employees.

The Green Mortgage program led to reductions of 60 percent in water consumption in the new homes, compared to traditional homes, as well as reductions of 50 percent in gas, and 40 percent in electricity. Greenhouse gas emissions fell 1.2 tons per dwelling per year.

The financial incentive earned a UN World Habitat award and an Inter-American Development Bank Beyond Banking prize for encouraging developers to outfit homes with energy-efficient materials and appliances by offering government subsidised loans to the purchasers.

In the EcoHouse program, green mortgages will be extended beyond National Housing Fund recipients to 1,700 other home buyers  financed through the State Workers Housing Fund for public employees as well as to breadwinners not eligible for either fund.

Some 27,600 Eco Houses are slated for completion before 2020. Since construction began in December, three developers have finished 84 Eco Houses in the south central Mexican state of Hidalgo.

The finished houses, in the Hidalgo state capital of Pachuca, are ready to occupy as soon as the buyers make plans to move, according to Tobias Contreras, a spokesman for VINTE, one of the three developers working on Phase I of the programme.

VINTE and two other developers were chosen to participate in the programme on the basis of capacity, experience and inventiveness in energy efficiency measures. The three have started work on 2,500 new units and expect to complete 9,500 in Phase 1.

So far lenders have extended them $900,000 in credit. When the contractors repay the loans, the money goes back into the programme to finance building more Eco Houses in Phase II, according to the scheme.


Eco House developers are free to select the materials they prefer to meet efficiency guidelines. At the outset of the programme, the developers are relying on concrete structural components and polystyrene insulation, according to Adrian Araujo, a spokesman for the National Mortgage Society.

Polystyrene is a petroleum product that exudes hydro chlorofluorocarbons, scientifically linked to ozone depletion and global warming. The material takes hundreds of years to decompose.

A 5-hectare forest plot would be necessary to offset the carbon dioxide emissions of each typical cement block house in Mexico, according to international award-winning Mexican architect and green builder Alejandra Caballero.

But the programme is expected over time to create growing demand for climate-friendly insulation and other building materials, administrators said.  Improving manufacturing of green construction products is one of the stated Eco House programme goals.

Backers of the programme acknowledge that home builders will require technical assistance to design and build next-generation homes.  The programme earmarks $660,000 from the Clean Technology Fund for external advisers and consultants in the design and certification processes.


One important step forward, within the Eco House programme, is a newly launched system of grants of $7,000 to $17,000, from the European Commission’s Latin American Investment Facility, to help build 800 special “passive” houses which need no active heating or cooling systems, Healy said.

Such houses are expected to eventually account for the majority of the 1-million-ton reduction in greenhouse gas emissions sought through the Eco House programme.

Green building is alive and well in Mexico. Its techniques include do-it-yourself strategic landscaping, water catchment, and construction with materials such as local mud, straw, and thatch that provide inexpensive, low-carbon and healthy alternatives to tract housing.

Healy said some methods of “bio construction”, such as adobe building, are out of the running for use in Eco House homes because they are too “artisanal” for the large scale of the project. However at least one builder is seeking certification to use compressed earth blocks, breaking the trail for other green builders to take advantage of the financing opportunities.

Part of the Eco Home foreign investment will fund monitoring, evaluation and efforts to raise awareness among both home builders and buyers about the importance of energy conservation in curbing global warming.

The most exciting aspect of the monitoring is an in-home device that shows residents their energy use in real time, said VINTE’s Contreras.

Technicians at VINTE invented and patented the meter, which Contreras hopes will raise awareness of water, gas, electricity and other consumption costs and ultimately contribute to building demand for environmentally friendly features in homes.

 “You can’t save what you can’t measure,” he notes.


For more information, please contact:

Steven Shalita, CIF Communications

The right renewables? Location, location, location!
In the News | Jun 26 2013

At the Birdlife World Congress (June 19-22), the CIF joined high-level panelists to explore strategies and experiences in working with renewable energy developments and provide insight into robust and strategic impact assessment, safeguards, policy development, and the importance of environmental recovery in addressing climate change.

The right renewables? Location, location, location!
In the News | Jun 26 2013

At the Birdlife World Congress (June 19-22), the CIF joined high-level panelists to explore strategies and experiences in working with renewable energy developments and provide insight into robust and strategic impact assessment, safeguards, policy development, and the importance of environmental recovery in addressing climate change.

Eye on the Sky: Examining Wind Power, Birds, and Bats
Feature Story | Jun 14 2013
Wind turbines and transmission lines can displace bird and bat populations and disrupt breeding and feeding.


Wind power is renewable, sustainable, low-carbon, and gaining momentum worldwide: about 10% annual market growth and 19% cumulative capacity growth according to the Global Wind Energy Council (2012). But just because wind-generated energy is considered “green” does not mean it is harmless to the environment and biodiversity. Of particular concern is the threat that wind power can pose to birds and bats in flight and on the ground.  
To understand better the potential impacts of wind power on birds and bats and how to minimize risks, the Climate Investment Funds (CIF) have been bringing together representatives from CIF pilot countries governments, civil society, private sector, multilateral development banks (MDB), and other partners in a series of roundtable discussions and learning workshops to share experiences and innovations. The CIF has a mandate to promote learning and exchange knowledge on the challenges of effectively delivering climate action, not to mention an over $700 million stake in supporting wind power expansion in middle income and developing countries like Ethiopia, Egypt, Mexico, Morocco,South Africa, Turkey, and Ukraine. Focusing on Egypt, South Africa, and Turkey as case studies, this CIF Learning effort is revealing a growing list of best practices and resources, as well as these key findings:
Potential impacts are multiple and cause for concern.
Wind turbines, transmission lines, and associated infrastructure can displace bird and bat populations and disrupt breeding, feeding, and migration patterns. Birds can suffer fatal midair collisions with wind turbines and transmission lines, as well as electrocutions, while bats are prone to barotrauma brought on by a drop in air pressure near turning turbine blades. The introduction of green spaces, water, lighting, and refuse near wind farm structures can attract birds and bats, putting them at greater risk. These threats are compounded when the species in question are endangered or rare. 
“At this point in time, the impacts are considerably less than, for example, those of agriculture, forestry, and deforestation, but as wind energy development is scaled up, covering a much larger land area, and as some of these developments are being advanced in very sensitive regions of the world, this is certainly an issue we need to give due consideration,” stated Richard Grimmet of BirdLife International at the CIF Master Class on Managing the Impact of Wind Power Development on Birds and Bats in Istanbul, Turkey on November 1, 2012.  
Prevention is the best cure. 
Upholding the mitigation hierarchy—avoid, reduce, mitigate, offset—CIF stakeholders agree the best way to protect biodiversity is to avoid building wind farms in areas critical to bird and bat populations. Identifying these areas can be achieved through avian sensitivity mapping and strategic environmental impact assessments in the early planning stages of development. However, assessment standards and regulations vary by country as does capacity to collect and analyze data. Study on bats is a noted deficiency in many CIF countries.  
Egypt (pdf), which aims to satisfy 20% of its electricity needs through renewable energy by 2020 (including 12% from wind energy or about 7,200 MW of installed capacity), is also home to 34 Important Bird Areas. Bird migration over the wind-rich Gulf of Suez is a major concern to wind power development. Ornithological impact assessments (2006, 2009, 2011) have identified critical flyways and migration patterns, allowing developers to pinpoint low-impact sites for wind power projects and prompting the relocation (and subsequent delay) of a 200 MW wind farm being financed in part by $50 million from the Clean Technology Fund (CTF). 
Who bears and shares the responsibility and cost of mitigation is not definitive. 
Proven mitigation measures such as temporary shut-down of turbines, higher cut-in speeds, radar detection and other post-construction monitoring systems can greatly reduce impacts to avifauna. However, monitoring is resource-intensive and idled turbines mean lost generation capacity and revenue. Disparity in regulations and standards, as well as cooperation, makes this a gray area. 
Particularly for shut downs, clear command and control arrangements and effective coordination between operators are required. “It is just not going to work if one operator shuts down and another doesn’t,” warned Grimmet.  
Private utility Zorlu Energy (video), which owns and operates a 135 MW wind farm in Osmaniye, has taken it upon itself to become the first operator in Turkey to install a bird monitoring radar system that automatically shuts down specific turbines as bird movement is detected. The system’s constant data collection is also building a database of ornithological information previously unavailable in Turkey. The radar represents a half-million dollar investment in technology and training, and the periodic shut-downs are accepted as necessary financial loss. 
“We have tried to be a case study and example to other power plants,” said Erdinc Cetin, Senior Deputy Manager of Project Finance for Zorlu Energy.  
Greater capacity and cooperation are needed. 
Governments, project developers, and other stakeholders need to be equipped with more knowledge and experience to manage biodiversity issues. Investments in skills training, learning workshops, data sharing, and stakeholder engagement are necessary at the national and regional level. 
Recounting the CIF roundtable discussion in Ankara, Turkey on September 6, 2012, Jose Tavares of the Royal Society for the Protection of Birds, Turkey stressed, “The role the CIF has played very well today is sitting all the stakeholders around the same table and facilitating a discussion. It was great to have ministries, industry, banks, and the environmental sector discussing impacts on birds and biodiversity.” 
Participants at the CIF Master Class suggested an international community of practice could build off of CIF learning efforts by compiling and disseminating documentation on best practices, connecting experienced countries and operators with newcomers, and encouraging collaboration amongst stakeholders to leverage comparative advantages and create synergies.
Although new to wind energy, South Africa’s public utility Eskom (pdf) is drawing on its 16-year strategic partnership with Endangered Wildlife Trust (EWT) (pdf) to ensure South Africa’s wind industry grows in an environmentally responsible way using the same methodologies and approaches Eskom and EWT have  developed to address environmental and biodiversity impacts of the Eskom’s 400,000 km transmission network. 
“This is a unique partnership between a conservationist NGO and industry. It was built on the spirit of mutual trust and cooperation, integrating engineering and ornithological skills to develop and implement solutions,” explained Megan Diamond, WEP Programme Manager for the EWT.
According to Rudi Kruger, Corporate Specialist for Eskom, “The scope and variety of expertise on electricity and wildlife interactions currently residing within the program is arguably unique in the world. Nowhere else has a comparable body of knowledge been built up on such a wide range of interactions in this field.”
The Eskom/EWT relationship has helped integrate biodiversity considerations into all phases of the Eskom project life-cycle, including detailed biodiversity assessments and avifaunal studies augmented by bird sensitivity maps and input from ornithological experts and site specific studies for all Eskom wind energy projects. This research has guided siting and route selection, including that of associated infrastructure. Moreover, Eskom and the South African Wind Energy Association (SAWEA) have also endorsed best practices guidelines on avian monitoring and impact mitigation developed by the EWT. 
Full reports and presentations, including video, from CIF Learning events on the impacts of wind power on birds and bats are available.
For more information, please contact:
CIF Administrative Unit
Zhihong Zhang
CTF Program Coordinator
Turkish appliance manufacturer, Sinbo, uses 12% less energy thanks to an EBRD-financed upgrade
In the News | Jun 13 2013

Sinbo, a leading Turkish manufacturer, received $9 million in financing to reduce its energy consumption from the EBRD’s Turkish Sustainable Energy Financing Facility (TurSEFF), which benefits from $50 million in concessional and grant co-financing through the Clean Technology Fund.

Assessment of the Impact of the CTF on the Renewable Energy and Energy Efficiency Market in Turkey
Press Release | Jun 07 2013

Photo: World Bank

WASHINGTON, D.C., June 7, 2013 — The Clean Technology Fund (CTF), jointly with the World Bank, International Finance Corporation (IFC), and European Bank for Reconstruction and Development (EBRD), have launched the Assessment Report of the Clean Technology Fund in Renewable Energy and Energy Efficiency Market in Turkey.

The report analyzes the impact that the CTF has had on the renewable energy and energy efficiency market in Turkey, verifies the methodology used and the data on emission reductions reported by beneficiary banks and other recipients of CTF funds, and reviews the monitoring and evaluation system of various government institutions. It validates the emission reductions achieved through the CTF, which are estimated to be over 2 million tons per year for all of the projects financed by the CTF and international financial institutions (IFIs). The report also makes recommendations on how to strengthen further the monitoring and evaluation system for renewable energy and energy efficiency investments in Turkey. 

As electricity demand has increased rapidly over recent years of high economic growth, Turkey faces the twin challenge of ensuring energy security and containing greenhouse gas emissions to mitigate climate change.  Low-interest CTF loans have helped to increase privately operated renewable energy production and private sector energy efficiency, thereby reducing greenhouse gas emissions and energy cost, and ultimately contributing to the transformation of the Turkish energy sector.

To date, the CTF has provided $200 million in soft loans and technical assistance to promote private sector investment in energy efficiency and renewable energy projects in Turkey. Backed by this commitment, EBRD provided and mobilized $285 million and IFC provided $255 million for financing renewable energy and energy efficiency projects through financial institutions. The World Bank’s contribution in support of related private sector projects has reached $1 billion. The total volume contributed and mobilized by the multilateral development banks (MDBs) topped $1.535 billion by the end of 2012.

Turkey was the first country to have benefitted from CTF funds and Turkish Minister of Energy and Natural Resources Taner Yildiz stated: “Partnering with the multilateral development banks through the CTF has helped Turkey to scale up investments in energy efficiency, renewable energy, and smart grids by empowering its own national private and banking sector. The fact that Turkey has been a first mover in achieving results on the ground has inspired investors and emboldened us to be even more ambitious not only in the scale of investments we seek to achieve but also in the types of renewable technologies we are considering.”

Country Director of the World Bank in Turkey, Martin Raiser stated: “The CTF was set up to support transformational investments. Through its CTF program, Turkey has launched the transformation of its energy sector towards greater reliance on renewable energy sources, and has shown that this is not just good for the climate but can be good for business, too. Much remains to be done, particularly to boost energy efficiency and decouple growth from emissions. The international financial institutions stand ready to help Turkey take further climate action.”

Dimitris Tsitsiragos, IFC Vice President Europe, Central Asia, Middle East and North Africa said: “Climate change is one of the biggest issues in development today. While public policy is key to address these issues, private sector will play a significant role to meet the challenge and to create opportunities through new technologies and innovation for energy efficiency, renewable energy and climate friendly finance projects. Supporting climate change business continues to be a key element of IFC’s strategy in Turkey.”

Mike Davey, EBRD Director for Turkey said:“Energy efficiency is and will be for the long term a key factor for the competitiveness of Turkish businesses as well as in promoting macro-economic stability. By maintaining and building its focus on sustainable development, Turkey can further build on its position as a regional leader in investment and innovation. The EBRD will continue to support Turkey and its businesses alongside that road through its financing of investments in sustainable energy and resource efficiency, from renewables to energy recovery to waste recycling. To date, more than 40% of EBRD’s Euro 3 billion portfolio in Turkey has been provided for those purposes”.

The CTF, one of the four funding windows of the $7.6 billion Climate Investment Funds (CIF),provides middle income countries with resources to explore options to scale up the demonstration, deployment, and transfer of low-carbon, clean technologies in transport, energy efficiency, and renewable energy such as wind, solar, and geothermal power.  Each country tailors its CTF investment plan to be integrated into national development objectives and to serve as a framework for activities across institutions, stakeholders, and sectors. The governments of Australia, Canada, France, Germany, Japan, Spain, Sweden, United Kingdom, and United States have pledged $5.2 billion to this multilateral fund administered through the five MDBs: the African Development Bank (AfDB), Asian Development Bank (ADB), Inter-American Development Bank (IDB), EBRD, and the World Bank Group, including IFC. 

For more information, please contact:

Steven Kenneth Shalita 

Senior Communications Officer 

Climate Investment Funds


EBRD to Finance Largest Biogas Grid-Connected Project in Ukraine
Press Release | Jun 06 2013

The EBRD is organizing a financing facility of up to €4.2 million for a 1.5MW biogas plant at the privately owned agribusiness company Ecoprod in eastern Ukraine. This project is part of the Ukraine Sustainable Energy Lending Facility (USELF), an investment facility of €70 million (€50 million from the EBRD and €20 million from the CTF) designed to provide finance to private local enterprises wishing to invest in renewable energy projects in Ukraine.

Reaching Out to New Partners
Reclassify | Jun 06 2013

Funke Oyewole introduces visitors to the CIF and listens to their inquires and ideas at the 10th Carbon Expo in Barcelona, Spain on May 28-31. (Photo: CIF AU)


Commentary by Funke Oyewole, CIF Deputy Program Manager

“What do you do, and how can you help us do what we do?” That was the recurring question from visitors to the Climate Investment Funds’ (CIF) booth at the 10th Carbon Expo last week in Barcelona, Spain from May 28-31. The first forum of the UNFCCC’s Standing Committee on Financebrought us to town, but we stayed to take advantage of the proceeding expo to introduce the CIF to a wider audience.  Considered the leading global platform for dialogue between climate finance and carbon markets, industry, and technology, the Carbon Expo was a perfect opportunity for the CIF to reach out to new partners and start some new conversations.

And that we did.  Over three days, approximately 100 people visited the CIF booth and engaged directly with us, while still more browsed our colorful exhibit. Consulting firms stopped by interested in exploring business prospects. Social entrepreneurs were looking for funding. International companies sought procurement opportunities. Government representatives from developing nations not involved currently in the CIF asked how they could join. Academics requested information on CIF lessons learned. Even our multilateral development bank partners, including the World Bank and the Asian Development Bank, came by to see what was new. 

All were looking for new and different approaches, mechanisms, and markets to expand low carbon growth, and many saw the CIF mitigation programs—the Clean Technology Fund(CTF), the Forest Investment Program(FIP), and the Program for Scaling Up Renewable Energy in Low Income Countries(SREP)—as a possible conduit for innovation. Carbon markets alone, especially in their current state of disarray, cannot propel the global mitigation effort needed to achieve a consolidated low-carbon energy system by 2050. They have to be a part of a broader suite of financial instruments that will provide an incentive to mobilize increasingly higher levels of capital into low carbon infrastructure. These realities did not, however, stop some participants at the Expo from exploring the CIF’s programmatic approaches and interventions at scale. If anything, these discussions helped to establish clearly the need for injecting new innovative thinking in the climate finance landscape.

The CIF is part of this climate finance landscape, and we told all these visitors about the CIF’s own brand of innovation in fostering a programmatic approach to low carbon, climate resilient development. We explained how CIF concessional financing is building private investor confidence in middle and low income countries by supporting government policies and reforms conducive to climate-smart business. We showed how the CIF is catalyzing investments and attracting significant co-financing by supporting risky upfront costs of tested-but-young climate approaches and technologies at a scale never before affordable. We discussed how the lessons being learned on the ground by our 49 pilot countries are shaping the CIF’s way forward, as well as that of the Green Climate Fund.

Engaging the private sector is central to the CIF’s success, and visitors were keen to learn more about opportunities to participate, especially through the CIF’s open call for innovative project proposals that engage the private sector in REDD+, climate resilience, and renewable energy in the pilot countries of the FIP, the Pilot Program for Climate Resilience (PPCR), and the SREP. Over $200 million has been set aside in these three funding windows for this competition, and deadlines are fast approaching in August 2013. 

The energy at the Carbon Expo was high, and the mood enterprising. The feeling lingers as we follow up with phone calls and emails to continue the conversations we began in Barcelona. We are not certain where it will all lead, but the CIF is steadfast in its goal to scale up climate finance and knowledge.

Private Sector Investing in Climate-Smart Enterprises in Mexico, Colombia
Reclassify | May 28 2013

Inter-American Development Bank recently approved the first-ever private sector FIP operation, which aims to bolster 60 community forest enterprises in Mexico. The private sector will also engage in Colombia’s CTF project for credit access to energy service companies.

North Africa solar scheme boosts capacity
In the News | May 09 2013

LONDON (Thomson Reuters Foundation) - A solar power production scheme stretching across North Africa and into the Middle East is being expanded to generate 1.12 gigawatts of energy for the region, making it the most ambitious programme of its kind, the African Development Bank has said.