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Performance and Credit Risk Guarantees and Financing Mechanisms for ESCO-structured Energy Projects

To encourage local banks in Mexico to provide long term financing to ESCO-structured energy efficiency projects and accept Nacional Financiera, SNC (NAFIN) guarantees with the project's cash flows as collateral.

Location

Mexico
19° 26' 3.12" N, 99° 8' 18.96" W
Main activity and output: 
  • Develop and finance three ESCO-structured projects in Mexico utilising newly created performance/credit risk guarantees and project-based financing mechanisms to be provided by NAFIN;
  • Obtain market feedback based on local bank requirements to finance the three projects for NAFIN to design the final financing mechanisms based on "lessons learned".
Expected impact: 
  • This project will result in NAFIN providing performance and credit risk guarantees and risk mitigation structures to local banks in Mexico to provide cash flow-based long term financing to ESCO-structured energy efficiency projects;
  • This type of financing will accelerate the implementation of energy efficiency projects and the growth of the ESCO industry in Mexico, which is comprised mostly of small and medium sized enterprises;
  • The financing structure will create replicable mechanisms that can be used to aggregate the financing of energy efficiency projects and reduce overall transaction costs.