Prosperity Fund Strategy and Guidance for Mexico

Contents

1. Introduction to the Prosperity Fund2. The Prosperity Fund High Level Goals 3. Prosperity Programme Objectives and Indicators 4. Priorities For Fiscal Year April 2012-March 2013

Annex 1: Advice on Regional and Global BidsAnnex 2: The Mexico Programme BoardAnnex 6: First, Second and Third Bidding Round Project Distribution FY 2011-2012Annex 7: Prosperity Fund Priorities 2011-2012Annex 8: Previous and Ongoing Project WorkAnnex 9: Current PartnersAnnex 10: Indicative timetable

Introduction

The Foreign & Commonwealth Office’s programme funds seek to create real, measurable outcomes in support of the FCO’s policy goals. The Prosperity Fund, which builds on the achievements of the previous Low Carbon High Growth Strategic Programme Fund, directly supports our implementation of the following Foreign Policy Priority:

“Build Britain’s prosperity by increasing exports and investment, opening markets, ensuring access to resources, and promoting sustainable global growth”.

An open global economy is the most effective way to support development and increased prosperity. This means that we will want to use the Prosperity Fund to support the

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establishment of transparent and stable regulatory regimes (including by tackling bribery and corruption) and the promotion of economic policies that underpin strong, sustainable, balanced and low carbon growth. We want to encourage openness to trade and investment, discourage protectionism, increase competitiveness and strengthen the multilateral trading system. In particular, we want to foster international support for this agenda in key countries through increasing commitment to open markets and free trade and promoting economic reforms.

If we are to avoid dangerous climate change, which will undermine the conditions necessary for sustainable global economic growth, we need urgently to transform the global economy to a low carbon one. Achieving this will depend to a large extent on agreeing and implementing an ambitious, comprehensive and equitable global framework agreement in the UN Framework Convention on Climate Change. But the political conditions are not yet in place to deliver the political commitment or the necessary shift in investment. Political will to tackle climate change will only be secured once leaders are confident that policies to mitigate climate change will not undermine their growth, prosperity and security objectives. The FCO’s role is to create those political conditions. The fund will support this work.

Low carbon policies can and should enhance energy security globally. But there will still be demand for energy from hydrocarbon sources into the medium term and oil and gas prices will continue to be key drivers in the global economy. We want to deepen engagement with energy producers, both bilaterally and in multilateral fora, and encourage conditions that enable the necessary investment in transitional oil and gas, promote price transparency and reduce volatility, encourage low carbon growth and improve the reliability of energy supplies. We want the fund to contribute by building support for open and effective international energy markets and by promoting the take-up of alternative energy sources and more efficient consumption of energy, including reducing and eliminating inefficient subsidies. We understand that the economy will only move towards low carbon when this is not incompatible with growth and increased prosperity. We want to encourage projects that will help to build this environment.

The overall impact of the Prosperity Fund should be transformational change in policies and actions that help individual countries and the world towards a secure climate with climatic changes restricted to 2 degrees or less with high levels of sustainable and green growth.

Mexico is a priority post for work on all three areas: climate change, energy security and securing an open global economy.

Prosperity High Level Goals

1. A stronger, more sustainable global economy 2. Enhanced security of resources underpinning UK and global prosperity

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3. International community on track for green growth

These high-level goals are linked. Projects for support under the Prosperity Fund may therefore address more than one goal.

If we are to avoid dangerous climate change, which will undermine the conditions necessary for sustainable global economic growth, we need urgently to transform the global economy to a low carbon one. While there is a long term need for large scale capital investment, there is also a need for smaller interventions to build capacity, strengthen the national consensus and to create effective public policy frameworks. Enhanced public policies can have a transformational impact on the ability of Mexico to set itself firmly on a pathway to sustainable and green growth and contributing to addressing the global challenges we face.

To support the development of public policies and actions in Mexico that can deliver green and sustainable growth and be an example for other developing countries of a mechanism for coordinated planning and synergistic application of international cooperation offered by various sources and countries, coordination should be promoted among implementers to deliver projects and activities aimed at the design and effective implementation of public policies and developing and strengthening the governmental and non – governmental institutional capacity Mexico needs to deliver green and sustainable growth.

Energy efficiency has improved but there remains significant scope for further action. Policies to promote energy security and moving further in the area of low carbon and renewables will require international partnerships, technology and private as well as public finance. Mexico has considerable potential in areas of wind, solar and geo-thermal energy.

Project proposals should demonstrate that they will leverage significant additional actions over and above the money invested by the FCO. Experience has shown that the best way to do this is to work towards high level policy change, build capacity in a sustainable way, translate evidence or analysis into action plans and work closely with host governments. This can also be achieved when FCO funding is used to leverage co-funding from other donors.

Partners can include government, business and NGOs, but working with governments and official bodies is more likely to result in high impact, transformational outcomes which outlive the duration of the project. We are looking for practical interventions that will lead to a real and timely difference to decision-making. Proposals focusing purely on research, analysis, seminars or workshops will not be relevant unless they lead to specific and measurable action. Projects can be at regional or state level within a country, provided that replicability is built into the proposal and sufficient impact is likely. Proposals must make clear that they are adding value to, and not duplicating other donor activity.

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Prosperity Programme Objectives and Indicators

Programme Objectives and Indicators *The primary beneficiary of project proposals submitted to the Prosperity Fund must be Mexico (included in the OECD DAC list), in line with DAC criteria.Objectives Indicators 1. Support for strong, stable and sustainable economic growth in Mexico, supporting the global economic recovery and global prosperity.

1.1 Support for Mexico to employ policies that pursue macroeconomic and financial stability. 1.2 Support for Mexico to undertake reforms designed to improve the business environment. 1.3 Support for Mexico to undertake financial regulatory reform to promote transparency and meet international standards. 1.4 Support for Mexico to implement measures to move towards a more efficient public sector. 1.5 Support for Mexico to undertake poverty and inequality reduction policies to foster sustainable economic growth.

2. Strengthened Mexico support for equitable trade. 2.1 Support for Mexico to undertake reforms and reduce barriers to market access. 2.2 Mexico supporting multilateral equitable trade negotiations promoting:

o Combat of corruption/briberyo Promotion of transparency, particularly in

tendering and bidding processeso Protection of intellectual property rightso Promotion competitiveness as a stimulant to

innovation and growtho Develop of stable legal and regulatory frameworks

including for international investment

3. Support for Mexico to make a positive contribution to global economic governance.

3.1 Support for Mexico to play an active role in multilateral fora, and support the coordination of macroeconomic policies in

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support of the global economic recovery and global prosperity. 4. Support for Mexico on policy and practice on green and sustainable growth.

4.1 Support for Mexico to explore green and sustainable growth into its economic planning and development strategies. 4.2 Support Mexican businesses to explore the green economy as an opportunity for activities which support a global transition to a low carbon economy including by increasing the likelihood of agreement on a comprehensive internationally binding framework on climate change, such as:

climate diplomacy/influencing promoting low carbon/green growth addressing and enhancing climate security promoting energy efficiency and alternative technologies

*For information on our previous project work and ongoing projects please refer to diagram on Annex 8

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PRIORITIES FOR FISCAL YEAR APRIL 2012-MARCH 2013 (Third bidding round highlighted)

Priorities Priorities worked by ongoing projects New prioritiesEconomic Reform • Strengthening fiscal policy, including broadening the tax

base and reducing inefficient subsidies. • Increasing commitment to open markets and free

trade. (reform of customs procedures)

• Increase competitiveness in key sectors (financial services, communication and labour market reform)

• Promoting transparency, including public services and open/competitive tendering/bribery.

• Planning and implementation of reform of the regulatory environment to promote business opportunities.

• Assisting the Mexican authorities to promote economic reforms and a stable economy.

• Building a stronger economy through developing policies promoting a highly skilled labour force, intellectual property and a stronger science and research and development base.

Energy Security • Promoting energy efficiency and alternative technologies • Deepen engagement with energy producers, both bilaterally and in multilateral forums.

• More efficient consumption of energy, including reducing and eliminating inefficient subsidies

• Encourage conditions that enable the necessary investment in transitional oil and gas

• Unconventional gas for energy security• Low carbon innovation science and technology• Promote price transparency and reduce

volatility • Improve the reliability of energy supplies • Building support for open and effective

international energy markets • Clean energy: renewables• Construction retrofitting

Climate Change, the Green Economy and Green Growth

• Planning and implementation on climate security issues including disaster relief, migration, water stress and government capacity

• Mexico as a regional and world leader on climate change.

• Strengthening capacity to adapt to climate change • Encouraging scientific collaboration and low carbon innovation.

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• Planning and promoting public transport solutions • Planning and delivery of a domestic strategy on sustainable development.

• Climate change actions that also benefit biodiversity and preserving the environment

• Mexico helps shape a successful outcome for the 2012 UN Conference on Sustainable Development (Rio+20)

• Promoting policies that effectively reduce greenhouse gas emissions

• Forestry

• Promoting private sector involvement at the national and international level to enhance a transition to a sustainable and low carbon development.

• In the area of green growth, energy efficiency, renewable energy, forestry, transport, and development of policies related to low carbon and sustainable/green growth. These would cover activities such as plans for energy efficiency, renewable energy, forestry, transportation. If other funders are interested in supporting other sectoral plans, the funding group will be open to discussion. Plans will include social, economic, and environmental cost-benefit analysis of pursuing a low-carbon pathway. A plan to improve technical capacity. An analysis of the legal and regulatory frameworks to identify the changes and additions needed to enable the effective implementation of ambitious climate mitigation plans and programs.

• Planning and implementation of green growth initiatives, and promote green growth internationally.

**Although proposals filling priorities worked by ongoing projects will be considered, more attention will be placed in proposals covering new priorities.

***For information on our previous project work and ongoing projects please refer to diagram on Annex 8

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Annex 1

Regional and global bids:

Apart from Mexico specific projects, the Mexico Prosperity Fund will also consider regional projects on a regional and – exceptionally – global level which include Mexico. All countries covered in regional or global projects must also comply with guideline on eligibility for classification as development assistance by the OECD.

A regional or global bid must have an impact potential in all of the countries involved and explain how this will be realised.

The bid must have the support of all the relevant British Embassies or High Commissions.

The bid should make clear the strategic importance of tackling that issue regionally or of the important influencing role that action in and with Mexico could have.

Should be clear what contribution each of the countries involved has to make. The bid should consider how the different conditions in each country could be met

within the same project and the union of the different project elements. A regional proposal is not just a composite of similar activities in nearby countries. The project outputs and purpose should achieve something more than the sum of the individual country projects. The implementing organisation(s) should have the relevant expertise and contacts in each country.

Any regional bid covering countries Mexico and Central America will need approval of colleagues in London and could take longer to consider.

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Annex 2

Proposed Mexico Programme Board

Chair: Her Majesty’s Ambassador or Deputy Head of Mission

Board Secretary: British Embassy Programme Manager Prosperity Fund

Members

British Embassy First Secretary Climate Change / SD / Energy British Embassy First Secretary Prosperity British Embassy First Secretary Commercial British Embassy Communication British Embassy Economist British Council Representative FCO Prosperity Fund Programme Secretariat

External Board Members: Director General Mexican Ministry of Environment (SEMARNAT) Director of International Affairs, Mexico Presidency International Relations Officer, European Union Delegation in Mexico Representative of United Nations Environmental Programme in Mexico Representatives of other donors and partners from the international, NGO and private

sectors

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Annex 10

Indicative TimetableTimeline for action

Third Bidding Round Timeline FY 2012-2013

Deadline  Activity 

10th July   Call for concept bids

 3rd August

 Deadline to submit concept bids to Programme Team

(e-mail: spf.infomexico@fco.gov.uk) It is strongly suggested to contact the

Programme Team before submitting a Bid to evaluate the feasibility of the

project. Priority will be given to those proposals.

 8th August  Programme Team evaluate proposals

 9th August

 Programme Team notification to Implementers announcing results of 

bidding round and invitation to send full bids for successful bidders (we will

contact only successful bidders)

31st August Deadline to submit full bids to Programme Team

(e-mail: spf.infomexico@fco.gov.uk)

7th

September Mexico Programme Board at Post meets

10th

September

 Notification to implementers announcing results of the third bidding round

FY 2012-2013

 

11 – 28

September

 Signature of Contracts

 1st October  Start date for projects

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First Bidding Round Timeline FY 2012-2013Dates Activity13 January Announce request for submission of Concept Bids10th February Deadline for Implementers to submit Concept Bids to Programme Team11th – 13th February Programme Team at Post reviews Concept Bids14th February Internal Programme Board Meeting

16th February Programme Team notification to Implementers announcing results of Concept Bids and Confirmation of Availability for Training

21-22nd February Trainings for Implementers at Post/ British Embassy in Mexico16th - 7th March Implementers develop Full Bids8th March Deadline for Implementers to submit Full Bids to Programme Team8th -14th March Programme Team at Post reviews Full Bids

14th March Programme Team finalizes full bids review and sends to Mexico Programme Board for Appraisal Preparation

19th March Mexico Programme Board at Post meets

21st March Programme Team notification to Implementers announcing results of first bidding round

1st April Planned Start of Projects

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