According to Nasdaq,Mexico is set to receive three loans totaling $700 million in order to support their drive toward a more eco-friendly infrastructure. The announcement,made by Mexico’s Finance Ministry,comes just days before the United Nations conference on climate change begins in the resort town of Cancun. Being approved for the loan is a strong vote of confidence for the Mexican economy.
The ministry noted that the loans will “underscore Mexico’s leadership role” on the topic of climate change. They will be used for a variety of different projects that will help the nation embrace green energy,clean water and clean air policies.
The first loan is for $400 million for 14 years. It is earmarked for increasing the availability of renewable energy in Mexico. It will also be used to promote sustainable forestry practices which will help preserved natural lands in Mexico. The final portion of that loan will be used to create sustainable housing in the country which will limit the impact of construction on the environment.
The second loan is for $250 million and is amortized over 12 years. The second and the first loans have a variable interest rate based on the London Interbank Offered Rate,or Libor. This loan is to support the Energy Ministry program which encourages eco-friendly energy policies in Mexico homes and businesses. Primarily,the program encourages citizens to use energy-saving light bulbs and replace their inefficient appliances that use too much energy.
The third loan is a conditional $50 million credit from the World Bank’s clean technology fund for the Mexican development bank Nacional Financiera. This loan will also be used for the Energy Ministry program,but unlike the others will amortize over 20 years,with a 10-year grace period.
The three loans are within the Mexican ceiling for indebtedness,which was authorized by Congress in 2010. The loans will help position Mexico as a strong leader in the global fight to limit the effects of global warming.