Mexico: Sustainable Urban Development

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The Project will participate in financing of the Urban Upgrading Program (UUP) of the Secretariat for Agrarian, Territorial andUrban Development (SEDATU, in Spanish) (i) identify and finance urban investments that address infrastructure deficits andcontribute to sustainability and livability of urban areas, including, inter-alia, the construction, expansion, upgrading orrehabilitation of public space, community centers, parks, rehabilitation of streets, and active mobility investments; and (ii)improve urban management capacities to contribute to low-carbon and resilient urban development. The UUP is a program establishedin 2019, the following programmatic areas: (i) Neighborhood Upgrading, (ii) Land Regularization, and (iii) Urban, Metropolitan andTerritorial Planning. The first is the most important operational program in terms of the budget allocation, supporting: (a) PublicFacilities and Space, (b) Mobility and Connectivity, (c) Urban Infrastructure; and (d) Urban Design. In line with the UUP’sOperational Rules, the Project support under the different modalities is designed to (i) benefit indigenous communities andAfro-Mexicans; (ii) improve women’s access and use of the public space, including by facilitating care-taking activities andreducing safety concerns through strategic investments like improved lighting and safe street design; (iii) contribute to improvedclimate change adaptation or mitigation outcomes; and (iv) contribute to the reactivation of local economic activity in the contextof the pandemic.The Project will be comprised by the following components: Component 1 - Urban Upgrading Investments:The Project will finance targeted urban investments to increase sustainability and quality of life for families in eligiblemunicipalities. The Project will finance, inter-alia, the construction, expansion, upgrading or rehabilitation of public space,community centers, parks, rehabilitation of streets, and active mobility investments in selected municipalities of Mexico. Eachinvestment is based on the elaboration of an Urban Action Plan, which contains a technical analysis of the territory, includingrelevant sociodemographic, economic and risk information, to substantiate the proposal of a series of strategic investmentsubprojects in each Priority Area (“Poligono de Atencion Prioritaria”). The methodology to identify the Priority Areas forinterventions within each municipality is based on established indices that cover: (i) the urban marginalization index, developedby the National Council of Population (CONAPO) based on a range of socioeconomic indicators to determine poverty levels; (ii) thesocial marginalization index, established by the National Council for the Evaluation of Social Development Policy (CONEVAL); and(iii) housing quality and urban environment index based on national census data by the National Institute of Statistics andGeography (INEGI).The size of investments will vary depending on the scale of the subproject, the size of the municipality andthe catchment area, potentially ranging from US$85,000 to US$4.8 million. Component 2 - Institutional strengthening for urbanmanagement: Component 2 will support institutional strengthening and capacity building within SEDATU, including inter-alia: (i)technical analysis and recommendations to strengthen the Operational Rules of the UUP; (ii) institutional analysis to identify thenature of support needed to maximize the impact of investments by SEDATU or National Institute for Sustainable Land (INSUS) tostrengthen land tenure security; (iii) targeted capacity building to ensure the systematic incorporation of gender-inclusive andclimate-sensitive design guidelines in the identification, definition and implementation of investments; and (iv) targetedtechnical support to strengthen SEDATU’s territorial data and information systems.Furthermore, Component 2 will provide technicaland financial assistance to eligible municipalities to develop or update relevant planning instruments in line with the provisionsof the 2016 General Law on Human Settlements, Land-use Management, and Urban Development (LGAHOTDU). This can include support forthe elaboration of Municipal Urban Development Plans and, as required, state-level Land Use and Urban Development Plans orMetropolitan Programs. The elaboration of the plans follows the guidelines set out by SEDATU in 2020 (“Lineamientos Simplificadospara la Elaboracion de Planes o Programas Municipales de Desarrollo Urbano”), which highlight people-centered territorialdevelopment; the optimal integration of human settlement with the natural environment; and inclusive economic development as theoverarching planning priorities.The proposed Project aligns with the Country Partnership Strategy (CPF) for the period 2020–2025.In particular, the Project contributes to enabling sustainable infrastructure and climate action through ‘Objective 6: Provide moreinclusive and sustainable infrastructure services’, by supporting the Government of Mexico’s (GoM) efforts to improve municipalplanning capacity and promote sustainable and inclusive urban infrastructure investments, and ‘Objective 7: Support the governmentin reaching its climate change goals’, by strengthening systemic measures and policies in place to reduce energy consumption andemissions amongst Mexican municipalities.