World Bank Loan to Help Mexico City Battle Smog

Mexico is expected to receive $306 million in World Bank financing during the next four years to fight pollution, two-thirds of it in an unprecedented loan to combat smog from car and truck fumes.

“Because vehicles are the major source of pollution in Mexico City, we are becoming involved for the first time in a transportation-related program,” said Carl-Heinz Mumme, the World Bank senior economist in charge of the project.

“If this first project is successful, we expect to be involved for a long time,” he said in an interview after a briefing for correspondents on U.S.-Mexico environmental cooperation efforts.

Vehicles generate about 75% to 80% of the air pollution in Mexico City, considered among the world’s smoggiest cities.

Richard Fineberg, executive vice president of the Overseas Development Council, a Washington think tank, said the loan reflects a broad policy trend in World Bank lending.

“There is no question the World Bank is taking environmental problems with increasing intensity,” he said. “There is growing awareness worldwide that no-holds-barred development defeats itself if environment spillovers are not addressed.”

World Bank experts are currently studying Mexico’s air pollution problems and plan to make specific recommendations for project funding. Preliminary approval for about $200 million in loans is expected in June, with final approval in September, said Mumme.

The World Bank has allowed $22 million in transportation financing to be used for air pollution control measures, Mumme said. Most of that money already has been spent on replacing engines on city buses and improving air monitoring systems in the city’s suburbs.

Besides the air pollution-related lending for the capital city, the World Bank is close to approving an $84-million loan for a nationwide program to fight industrial pollution.