Promoting green finance for the people and environment of the Mexico-US border

The North American Development Bank (NADB) is a binational financial institution established by the Govts. of the United States and Mexico to provide financing to support the development and implementation of infrastructure projects, as well as to provide technical and other assistance for projects and actions that preserve, protect or enhance the environment and well-being of the people living in the border region between the countries (pop. ~23 million people). NADB has US$ 6 billion in total capital subscribed equally by the United States and Mexico. To date, NADB has financed 262 projects, helping more than 17.5 million vulnerable people. NADB was an early-comer in the financing of green projects, but it has fallen behind other financial institutions in the adoption of better operational and strategic standards in line with current environmental and social challenges. NADB´s financing is key for the achievement of SDGs, NDCs and environmental targets by local stakeholders. NADB is seeking to develop a partnership with GGGI to improve its green finance standards and green projects’ cycle. For this, the development of an MOU is being discussed and initial activities for GGGI to support with NADB funding have been identified: 1. Development of a 2025 roadmap to enhance NADB’s green banking. 2. Development and implementation of a Gender Policy to mainstream gender into the bank´s policy, systems and loan disbursement processes. 3. Development and implementation of an Environmental and Social Management System to screen and categorize the E&S risks of transactions and develop appropriate E&S risk mitigation strategies. 4. Development of a Green Loan Framework to enter into on-lending agreements with Mexican financial institutions for the disbursement of credit earmarked to low-carbon projects. The project targets to sign, commit and disburse at least US$ 25 million in green finance by end of 2021. This is expected to grow to three digits during the course of 2022.