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Mexican development bank Banobras has approved 361mn pesos (US$26.2mn) for the closure of the Bordo Poniente sanitary landfill, newspaper Reforma reported.
Banobras has also approved a 1.53bn-peso loan to pay for the construction of a biogas plant to generate electricity at the site.
The 25-year contract for the construction and operation of the biogas plant will be tendered in eight to 12 days, reported Reforma.
A total of 20 national and international companies are reported to be interested in the tender that will require an investment of 379mn pesos of the winning company's own resources.
Mexico City's (DF) government is currently looking for an alternative landfill site to house the 200t of garbage received daily that cannot be recycled or reused, DF public works secretary Fernando Aboitiz was reported as saying.
Bordo Poniente, one of the largest landfills in the world, is scheduled to close by December 31 under an agreement reached last year between the federal and DF governments.