IFC Invests $100M To Accelerate EV Transition In Mexico

The International Finance Corporation (IFC), part of the World Bank Group, has invested $100 million in a historic investment to finance Mexico's shift to electric mobility. The investment forms part of a larger $600 million financing deal that will assist Mexico in its ambition to lower greenhouse gas emissions by 35% by the year 2030, in accordance with its national climate strategy.

The investment will be made to Element Fleet Management Corporation, one of the world's top fleet management firms. The project aims to speed up the transition to electric vehicles (EVs) for commercial fleets in Mexico. The investment represents a key milestone toward decarbonizing the transport industry, which is still among the most significant carbon-emitting sectors globally.

With a structure of a sustainability-linked loan, IFC's $100 million commitment comprises a $75 million "A loan" from its own account and a further $25 million in "B loans" or parallel loans raised from third-party lenders. What makes this financing unique is the direct link to sustainability performance. The loan is linked to concrete environmental and social goals, such as carbon dioxide emissions reductions and gender inclusion enhancements in Element's Mexican operations.

The financing will go towards the purchase of electric and hybrid vehicles, such as battery electric vehicles (BEVs), hybrid electric vehicles (HEVs), and plug-in hybrid electric vehicles (PHEVs). Besides the procurement of the vehicles, the financing will also go towards the establishment of necessary electric vehicle charging infrastructure, the foundation for a larger ecosystem that promotes sustainable transportation.

Manuel Tamayo, Element Mexico's President, underscored the importance of the investment, saying, "This funding is a reflection of our commitment and an empowerer to build a lasting legacy of sustainable and positive effects. Sustainability is at the heart of our purpose." He added that this project not only aligns with Element's long-term vision but is also aligned with Mexico's wider environmental and economic growth aspirations.

IFC's assistance is not only economic but also strategic. Juan Gonzalo Flores, IFC's Country Manager for Mexico, termed the transaction "groundbreaking," citing its ability to spur the use of innovative fleet management models in the nation. "This project can catalyze broader adoption of EVs and show how private sector leadership can drive national climate targets," Flores stated.

Its effect is expected to be massive. By 2029, the project will lower more than 9,000 metric tonnes of carbon dioxide emissions per year. That is equivalent to taking thousands of internal combustion engine cars from the road each year. Furthermore, by targeting commercial fleets—which are normally traveling at higher intensities than individual cars—the project achieves most of its environmental benefit.

Another important aspect of the loan is its emphasis on gender mainstreaming. The financing has provisions that ensure enhanced female participation in Element's Mexican business. By including gender indicators in the loan deal, the initiative aims to enhance not only environmental sustainability but inclusive economic growth as well.

This strategy reflects a larger trend in sustainable finance, where investors and development institutions are increasingly examining environmental, social, and governance (ESG) metrics as core elements of their decision-making processes. By including such aims in the very fabric of financial instruments, stakeholders ensure that capital flows align with long-term societal goals.

Over the past decade, IFC has invested more than $11 billion in transport infrastructure across emerging markets, underscoring its commitment to enabling low-carbon transitions through private sector partnerships. With this latest investment, IFC is reinforcing its role as a key enabler of sustainable development, especially in countries like Mexico that are striving to meet ambitious climate goals.

The Element-IFC collaboration not only brings Mexico's transport electrification one step closer but also sets the stage for how public-private cooperation can galvanize effective climate action. As the world increasingly competes to reduce emissions, such efforts are sure to be at the forefront of transforming the mobility ecosystem—cleaning it up, making it more equitable, and making it more resilient for future generations.