Mexico Strengthening Entrepreneurship in Productive Forest Landscapes Project

Program Overview

The Mexico Strengthening Entrepreneurship in Productive Forest Landscapes Project (ISFL’s grant program in Mexico) aimed to strengthen sustainable forest management while also increasing economic opportunities for forest-dependent people and enterprises. This program closed in March 2025.

Program name	Mexico Strengthening Entrepreneurship in Productive Forest Landscapes Project
Jurisdiction	Nuevo León, Coahuila, Chihuahua, Durango
Size of jurisdiction	58 million hectares
Population in jurisdiction	14 million people
Drivers of land use change	Agricultural expansion and livestock production (cattle farming)
Accounting area	TBD
Implementing agency	National Forestry Commission (CONAFOR)
ISFL Funding	- $10 million in grant financing available through the government of Mexico
	- $4 million in funding for private sector engagement activities under the ER Program phase
	- Up to $18 million in results-based payments for verified emission reductions for Phase 1 ERPA, with the potential for sales of emission reductions in excess of those contracted. Emission reductions for ERPA Phase 2 to be negotiated.
Co-financing	- $119 million in government financing (CONAFOR) - $56 million from a World Bank loan for the Mexico Strengthening Entrepreneurship in Productive Forest Landscapes Project (across 19 states)

Private sector engagement is central to Mexico’s ISFL program, which seeks to promote collaboration between public and private actors in rural areas. The program also recognized the role of landscapes in biodiversity conservation and forest production, and will seek to strengthen the role of women in forest governance and production.

Mexico’s ISFL program had two components:

Strengthening forest management, conservation, and business development through the financing of forest sector demand-driven incentive programs that aim to support local communities, other landholders, and forest-dependent people in sustainably managing forests while increasing economic opportunities for forest resources; and
Providing institutional development and facilitation support to help in preparation for an ISFL Emission Reductions Program.

Building on the progress of this program, Mexico’s emission reductions program was prepared in a participatory manner, leveraging the tools and systems established under the initial program. The Emission Reductions Program will be implemented in two phases and aims to generate payments for measured, reported, and verified emission reductions from agriculture, forestry, and other land use sectors. The work will focus on reducing deforestation and forest degradation, enhancing forest carbon stocks, promoting sustainable forest management, and reducing emissions through improved livestock practices. The program will involve collaboration between various government agencies and stakeholders to achieve its objectives and will distribute emission reductions payments according to an agreed benefit-sharing plan.

Recent Progress - December 2025:

An advanced draft of the benefit-sharing plan has been developed together with relevant social risk management instruments, and ERPA negotiations between the government of Mexico and the ISFL contributors have concluded.
The grant program delivered and supported activities that bolstered the government’s institutional capacity to provide enhanced technical assistance for integrated landscape management and improve cross-sectoral coordination.
The grant also supported communities by providing them with forest fire combat equipment. The Program also work towards the strengthening of the existing forest fire early warning system and provision of enhanced forest equipment to support the early identification of forest fires through remote sensing and high-capacity drones.
In collaboration with the World Bank and the United Nations Food and Agriculture Organization (FAO), the grant program also developed a unique and holistic approach to evaluate the cost efficiency of field investments. This approach integrates indicators for conservation and productive management techniques, such as payments for environmental services, sustainable forest management, commercial plantations, and restoration.

Country Context

Drivers of deforestation

Land-use change in Mexico is a response to regional, national, and international market pressures for the extraction of timber products, mining, agriculture, tourism, urban and industrial development, and infrastructure projects (such as dams, roads, and highways). In the ISFL program area, key drivers of deforestation are agricultural expansion and livestock production, specifically cattle farming.

Key commodities and sectors

Agriculture and livestock production (cattle)

Policy interactions and green growth strategies

The General Law on Sustainable Forestry Development (LGDFS), through article 138 Bis, empowers the Ministry of Environment and Natural Resources (SEMARNAT) to enter into international agreements on cooperative mechanisms to reduce emissions in the forestry sector. It also states that the results-based payments resources will be distributed according to a BSP prepared in a participatory manner within the framework of the respective project.
The General Law on Climate Change (LGCC) sets out a framework for the development of Mexico’s forest registry.
Mexico has instituted a series of incentive programs, including the Payment for Environmental Services Program supported by the World Bank. Since 2003, it has spearheaded the application of economic instruments for forest conservation and the promotion of sustainable forest management practices.
The National Forestry Program (PRONAFOR) supports activities in the forestry sector to promote the sustainable use and conservation of forests. PRONAFOR’s strategies include promoting integrated landscape management, harmonizing and coordinating land policies and programs, and reducing GHG emissions caused by deforestation and forest degradation.

NDC commitments

Forests play a crucial role in achieving Mexico’s NDC target. Mexico’s updated NDC includes a target for zero deforestation by 2030.
Removals from the forestry sector represent around 26 percent of Mexico’s total emissions. According to Mexico’s third Biennial Update Report, the total emissions of the country in 2019 amounted to 736.62MtCO2e, while forests removals were 192.75.35 MtCO2e. Removals from the forest sector come from two main sources: forested land remaining as forested land and land converted to forest through afforestation and reforestation.