Overview

SCF has invested USD 43 Million in Grupo LUXUN, a leading Mexican renewable energy company that offers turn-key, rooftop solar energy installations for businesses and enterprises without up-front investments. Through an innovative Power Purchase Agreement (PPA) and leasing model, LUXUN eliminates financial and operational barriers to solar energy adoption while taking advantage of Mexico’s vast solar irradiance.

As the local sponsor, Grupo LUXUN is responsible for the entire development, procurement, installation supervision, and operation of the solar PV assets across Mexico’s national territory.

The five-year capital investment is financing the construction of over 160MW of solar panels and battery storage projects, expected to generate 256,000 MWh of clean and affordable energy annually for industrial and commercial use, avoid 119,311 tCO2 emissions per year (from 2027 onwards), and create approximately 42 direct jobs and 158 indirect employment opportunities.

The Challenge

Mexico’s energy mix is dominated by oil and gas, with oil accounting for almost half of the total. Mexico has a constant growing electricity sector, with demand increasing on average by 1.6% per year since 2000.

Distributed generation (DG) solar projects can help Mexico reduce its reliance on fossil fuels and avoid emissions. They are smaller and less regulated, with a threshold of 500 kilowatts – enough to power about 200 households.

In addition, it will contribute to the generation of direct and indirect employment and skills development in the communities, given that there will be multiple installations across the country.

SCF’s Involvement

1. Investment

The five-year, USD43 million capital investment by the Subnational Climate Fund is expected to finance the construction of +160MW of solar panels and battery storage projects.

2. Technical Assistance

SCF has delivered comprehensive technical assistance to de-risk the investment and ensure the project meets international environmental and social standards, delivering bankable due diligence that strengthens investor confidence and project sustainability.

The comprehensive technical assistance included:

Environmental & Social Impacts Assessments (ESIA) – A systematic evaluation of potential environmental and social risks across Grupo LUXUN’s operations at the company level. The assessment methodology aligns with International Finance Corporation (IFC) Environmental and Social Performance Standards, General EHS Guidelines, Gold Standard standards, and international best practices—ensuring compliance with the rigorous requirements of development finance institutions and impact investors.

Environmental and Social Management Plan (ESMP) – An operational framework establishing prevention, mitigation, and performance improvement measures to address identified ES risks throughout the project lifecycle. This plan provided actionable procedures and monitoring mechanisms that protect both investment returns and stakeholder interests across 160MW of distributed solar installations.

Gold Standard for the Global Goals Evaluation – An assessment of compliance with Gold Standard principles and safeguarding requirements, positioning the project for credible climate finance certification and enhanced access to carbon markets and impact-focused capital.

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