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Project has lapsed as of 26 September 2018


Energy Efficiency Green Bonds in Latin America and the Caribbean

TONNES of CO2 Anticipated tonnes of CO2 equivalent avoided


GCF results area
  • Buildings, cities, industries and appliances
Gender benefits Women employed/trained by ESCOs for energy efficiency projects UN Sustainable Development Goal
  • #7 Affordable and clean energy

Location & People

  • Latin America and the Caribbean
  • Mexico MEX

Investment Data

  • Financing:
    • Public
    • Public / Private
    • Private
  • Project size:
    • Micro
    • Small
    • Medium
    • Large
  • E&S Risk category:
    • Category I1
    • Category I2
    • Category I3
Total project investment
GCF Financing
  • Instrument Guarantee USD
  • Instrument Grant USD
  • CTF Guarantee USD
  • Private Sector Equity USD
Project value
"Project value" represents the expected size of the private sector green bond issuance under Phase I (Mexico) of the Programme. The financing structure for Phase I of the Programme consists of two steps. In the "Accumulation" step, individual energy efficiency projects are financed through a combination of loans provided by IDB and equity from the private sector, and are accumulated in a warehousing trust. In the "Mobilization" step, the warehousing trust will issue a green bond in the local Mexican capital market, pledged against the underlying cash flows of the energy efficiency projects held within the warehousing trust. The green bond issuance will be backed by partial credit guarantees extended by GCF, as well as by IDB and CTF. The proceeds from the green bond issuance will allow for a partial or full refinancing of the loan financing extended under the initial Accumulation step. Hence, to avoid potential double-counting, the value of the green bond issuance has not been specifically included as a component of co-financing sources for the Programme.

Project owners

Accredited Entity Executing Entity
  • Inter-American Development Bank (IDB) United States
Energy Efficiency Green Bonds in Latin America and the Caribbean Withdrawn Est. implementation period 6.0 years
Addressing demand-side energy efficiency in Latin America and the Caribbean through green bonds, by using the concept of aggregation to mobilize institutional funds at scale toward small and medium sized energy service companies.

The Programme addresses demand-side energy efficiency (EE), an area identified by the Intergovernmental Panel on Climate Change as comprising the greatest component of climate finance shortfall for mitigation. EE is one of the most competitive and cost efficient ways of responding to increasing energy demand, while reducing greenhouse gas emissions, lowering production costs and improving productivity. Lack of adequate financing is however a major barrier to private sector initiatives in energy efficiency.

In each targeted country, the Programme uses a two-phased approach to bridge that gap. It will, at first, fund energy efficiency projects using loans. Once a sufficient amount of projects are aggregated, the Programme will “bundle” them such that they will be used to underpin the issuance of partly guaranteed green bonds. In its initial phase, the Programme targets four Latin America and Caribbean countries – Colombia, the Dominican Republic, Jamaica and Mexico (as pilot country) – of which two are Small Island Developing States.
During the eleventh Board Meeting, the Board approved the amount of USD 20 million of Partial Credit Guarantees for the (pilot) Phase I in Mexico and USD 2 million as a programme development grant to facilitate the replication of the financing structure for Phase I into other capital markets in Latin America and the Caribbean under Phase II of the Progamme. The Board also allocated USD 195 million for Phase II of the Programme to be committed, subject to funding approval by the Board, in several tranches over the course of the next five years.

The Programme targets minimum emission reduction of 13.2 million tCO2e (2.5 million tCO2e in Phase I) and 780 million dollars (150 million dollars in Phase I) of private sector bond issuances with potential for further upscaling and replication in other developing countries.
The project page will capture Phase I information only, pending the approval by the Board of the next phase of the Programme.

The project has an estimated lifespan of 6 years.
Document title
Published date
Approved funding proposal FP006 - IDB - Mexico 03 Mar 2017
Accredited Entity
  • Inter-American Development Bank (IDB) Mr. Matias Bendersky Tel: +1 (202) 623-1723 Ms. Amal-Lee Amin Tel: +1 (202) 623-1924
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