Maria Carolina Hoyos Lievano
Consultant, Solutions and Innovations in Procurement, Governance Global Practice, World Bank
Mexico is at the forefront of climate-friendly solutions in various productive sectors. In line with the policies of Mexico's Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Food (SAGARPA), different actions have been implemented to promote the use of renewable sources of energy in the agricultural sector in order to generate sustainable rural development that helps to decrease the negative impacts on the environment.
One of these initiatives, the Sustainable Rural Development project, seeks to modernize and rehabilitate small- and medium-sized agribusinesses in order to improve their environmental sustainability, with special emphasis on the efficient consumption of energy and/or renewable energy, as well as promoting the sustainable management of waste and the conversion of biomass for its potential use as energy.
The project, implemented by the Shared-Risk Trust Fund (FIRCO) as part of SAGARPA, and with the technical and financial support of the World Bank, has been demonstrating tangible results since 2010. However, in 2015 it became evident that the procurement processes for small agricultural producers were complex and that there was the potential for achieving greater benefits for agribusinesses if an evaluation criteria was more suited to their needs. Small-scale farmers had to face unknown market situations and procurement processes that were difficult to comply with, implying a major investment in time and effort.
In order to take on this problem, the FIRCO team together with the World Bank developed a friendly online platform for all users that included market intelligence responding to local needs.
The first step in the process was the preparation of a Market Study of Equipment and Suppliers of Renewable Energy in the Mexican Agribusiness Sector. Recommendations from the study are as follows:
- The eligibility processes for beneficiaries and the certification of suppliers must be reviewed in order to make them more agile and transparent, thus avoiding practices of commercial disloyalty.
- The number of formalities to be done by beneficiaries needs to be reduced, avoiding the double or triple delivery of the same information in different formats.
- As part of the verification and certification process, suppliers need to deliver technical information regarding the performance of the systems they have installed.
The evaluation criteria of the offers were also reviewed. This meant that the traditional award criteria mainly based on prices were to be accompanied by other scored criteria such as after-sales services, the disposition of the supplier to make follow-up visits, any additional guarantees, and the proximity of the subproject location.
The use of the electronic procurement website was activated in 2015 and since has financed 101 agribusiness, mainly with photovoltaic technology, nearly 12.5 million dollars has been invested. "This project began with a direct goal of reducing greenhouse gas emissions through the implementation of technology in agriculture. However, we are now seeing that these technologies are becoming stronger nationally as an indirect result, providing better options for all users and improving the market" said Svetlana Edmeades, Manager of the Sustainable Rural Development project for the World Bank.
The platform allows small- and medium-sized agricultural producers to upload information about the type of technology they are looking for, and for companies that supply such technology to see these needs and bid for the contracts. The entire process includes the support of FIRCO specialists and since all information is accessible online, transparency of the operations and citizen oversight is ensured.