The Mexican federal mortgage association (Sociedad Hipotecaria Federal, SHF), which is the  housing development bank at federal level in Mexico, aims to boost the development of primary and secondary housing credit markets. The aim is to promote financing alternatives that positively influence the Mexican population and economy to foster  economic and social well-being, in addition to contributing to the fulfillment of environmental responsibility commitments, in order to achieve a vision of sustainable development.

The housing and urban development policy that has been implemented in recent years in Mexico has sought to promote mechanisms that encourage more compact cities, with sustainable urban development, integrating environmental elements , access to services, infrastructure and employment centers, in order to increase the quality of life of  inhabitants.

Within this context, SHF designed the Ecocasa program with the support of the Inter-American Development Bank (IDB) and the German Development Bank (KfW), which has been operating since 2013. The program aspires to  contribute to combat climate change while increasing the quality and welfare of the population; generating a sustainable housing market and giving low-income families access to energy efficient homes with a reduction 20%-40% in CO2 emissions, compared to a baseline housing that does not incorporate energy efficiency measures.  At the end of 2018, the Ecocasa Program had certified 61,548 homes, of which 85.4% were financed by SHF.

As a result of this experience, SHF conducted a series of studies during 2016 in order to identify the main challenges faced by housing developers, among which is the lack of incentives to boost infrastructure and equipment for housing integrating sustainability elements. This task is currently the responsibility of  municipalities, but given the inadequacy of local resources, many of them end up delegating development to developers, who find themselves in need of additional capital efforts in order to ensure minimum operating conditions of their projects, which is transferred to the price of housing.  In this way, the high investment of own capital in infrastructure can result in a barrier to the construction of new homes.

During 2017, SHF designed a financing product for housing infrastructure, its equipment and urbanization, with environmental and social sustainability characteristics, through the Housing Operation and Bank Financing Fund (FOVI) This scheme  allows developers to access resources to urbanize with funding rates, reducing burdens and financial costs, allowing greater urban and regional development through infrastructure and housing equipment projects with characteristics that promote sustainability, such as the reduction of greenhouse gas emissions, better use of water and better quality of life for Mexican families.

As part of the optimization of the operation and implementation of the Urbanization Scheme, the SHF requested a consultancy, through the non-reimbursable technical cooperation agreement  with the IDB, in its capacity as administrator of the resources of the International Climate Initiative (IKI) of the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU). The objective of this consultancy was to establish key elements that allowed to differentiate the habitual way of urbanizing the environment of a house, regarding the integration of national and international best practices, as well as in relation to the regulations in force in Mexico.

In this way, the Environmental Impact Assessment Tool (EIAT) was specifically designed for the Urbanization Program.This tool gives an estimate of mitigation in the life cycle of the infrastructure and equipment in housing developments, for their possible certification and subsequent entry of mitigated CO2 emissions to a voluntary carbon market. The EIAT considers parameterized elements in the use of materials, construction, operation and maintenance processes with which it accounts for energy and water efficiencies and, therefore, its representation in terms of Greenhouse Gas (GHG) emissions, as well as with respect to impacts derived from savings and accesses to equipment and infrastructure under the sustainable modality. In addition to estimating the Internal Rate of Return (IRR) of the services provided, as well as the environmental IRR for construction, operation and maintenance of the first year.

In this sense, within the methodological process, the objectives contained in the 2030 Agenda on Sustainable Development of the United Nations Organization (UN) developed during 2015 were integrated, especially those related to water management, resilience and inclusion, and security for the population.

Therefore, the result of this methodological approach and the tool that automates modeling, the main benefits for SHF are the quantification of the economic benefit, considering aspects of additionality, transparency, traceability, and ownership of certificates.

In conclusion, it could be said that the development of clear and structured criteria for urban projects allows to clearly define the economic, social, and environmental impact, thereby enabling the mobilization of actions to make sustainable investments in this sector.

  • For more information about the project, contact the project team leader, Enrique Nieto, Specialist in Capital Markets and Financial Institutions:
  • For more information on innovative green finance operations through national development banks, see


Related projects

LAC Green Finance Facility

Inter-American Development Bank (IABD / IDB / BID)

13/03/2018 Leer más