Context
Since 2012, Mexico has established a comprehensive climate policy framework. In 2015, it adopted ambitious NDCs, committing to reduce GHG emissions by 22% by 2030 compared to BAU levels. Under this scenario, the industry sector accounted for 115 MtCO₂e (17% of total emissions), with projections rising to 165 MtCO₂e by 2030.
SMEs are the backbone of Mexico’s economy, representing 98% of businesses, 75% of employment and 50% of GDP. They contribute around 12% of total GHG emissions, with an estimated mitigation potential of 6.91 MtCO₂e annually. However, they have rarely been prioritised in mitigation efforts. Energy efficiency (EE) offers cost reduction and emission-saving potential while enhancing competitiveness.
Since 2014, mitigation actions have promoted EE in SMEs. Until 2021, the Mitigation Action Facility supported 35,613 SMEs through concessional loans for standardised EE measures. While mitigation impacts remained modest, a broad publicly funded technical support structure was established.
Goals and approach to transformational change
The “Energy efficiency in small and medium enterprises as a contribution to a low carbon economy” project offered technical and financial assistance to the above-mentioned SME mitigation measures to considerably extend its scope by initiating a second implementation phase. A strategy was developed to provide financing for more complex EE measures, such as the optimisation of systems in medium-sized enterprises (compressed air, steam generation and distribution, industrial refrigeration, amongst others), which required higher investment costs but had a higher energy savings potential, resulting in greater GHG reductions. Furthermore, by introducing commercial banks as financial intermediaries, private capital was leveraged, providing considerable up-scaling opportunities.
The project focused on developing a dynamic and robust market for EE in SMEs, with a significant contribution of private capital and replication potential in other sectors. For this purpose, a new technological approach, based on optimising energy systems performance in selected SMEs’ sub-sectors (i.e. hotels, chemical industry, food processing industry, etc.), was implemented. A qualified EE services offer, integrated by certified consulting companies, was also established. Moreover, market and financial barriers were addressed to attract the involvement of commercial banks in EE financing.
Components and support mechanisms
Financial Cooperation (FC) supported the setup of a guarantee fund (EUR 7 million) and a grant-based subsidy scheme (EUR 2.5 million) to finance investments in EE measures. A leveraging effect of at least EUR 70 million inprivate capital was anticipated.
Technical Cooperation (TC) focused on strengthening awareness and demand for EE among key stakeholders and on building a pipeline of bankable projects. This included developing a qualified market of certified EE service providers and increasing SME awareness of the economic and environmental benefits of EE, particularly its contribution to competitiveness.
Long-term impact
By the end of 2025, a total of 2,114.47 tCO2e were mitigated, which represents almost four times the value reported in 2024. Additionally, the project had demonstrated meaningful progress toward catalysing transformational change beyond its direct activities. With 91% progress towards its target, the project had reached Level 3 of transformational change (M3). This reflected a more consolidated and coordinated institutional ecosystem around NAFIN, as well as engagement across financial, public and private sector actors. Progress was particularly evident in the solar PV segment, where EC Solar had mobilised financing for 43 projects since its launch in mid-2025.
It is estimated that during 2026, as the projects financed through EC Solar in the second half of 2025 come into full implementation, an additional 8,990.34 tCO2e per year will be mitigated.
