FC programme to implement national climate protection targets in the Mexican transport sector

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The project provides for an FC development loan of up to EUR 100 million to the Mexican development bank NAFIN, which provides loans to MSMEs for the financing of low-emission vehicles via financial intermediaries and, if necessary, directly. The FC loan is accompanied by an investment grant of EUR 10 million. The investment grant provides scrapping premiums for MSMEs that receive a loan to finance a low-emission vehicle as part of the project and have their old vehicle scrapped. The aim of the FC module is to contribute to reducing greenhouse gas emissions in the transport sector in Mexico and thus to support the Mexican government in fulfilling its climate commitments (NDC). In order to actually achieve the targeted emission savings, one old vehicle is scrapped for every new vehicle. Since there are currently hardly any regulatory or financial incentives for scrapping vehicles in Mexico, borrowers are offered scrapping premiums, which are financed by the investment grant and contributions from the participating Mexican states. The direct target group of the FC project is MSMEs in the urban transport sector in the states of Mexico City, Jalisco and Oaxaca. The indirect target group is the population in the cities or urban areas in which the project is being implemented. They benefit from improved transport conditions and, thanks to the reduction in nitrogen oxide, soot and fine dust emissions, from improved air quality and the resulting lower health risks of respiratory diseases.