Mexico announced a new program aimed at buoying the country’s battered homebuilders by promising to put up billions of pesos to back commercial credit to the industry.

The 15 billion pesos ($1.2 billion) fund “will favor a healthy flow of credit for the construction of new homes,” said Deputy Finance Minister Fernando Aportela, speaking a press conference in Mexico City on Wednesday.

Under the program, the government would guarantee losses of up to 30 percent of the total amount loaned to homebuilders this year, to the tune of 15 billion pesos. That sum represents 40 percent to 50 percent of all the money loaned to the sector last year.

In exchange for the guarantee, banks would pay a premium, though the government did not detail the amount.

The news boosted shares in Mexican homebuilders, whose earnings have faltered in the last two years as the government adopted policies favoring pricey urban high-rise and sustainable development. Many homebuilders have large land holdings outside cities that have lost value thanks to the new policies.

But Arianna Gonzalez, an analyst at Signum Research in Mexico City, said the jury is still out on whether the indirect support will induce Mexico’s famously cautious banks, which are still mindful of the 1994-95 banking crisis, to lend.

“I’m very skeptical of the effect [the program] can have,” Gonzalez said.

She explained that instead of direct government support to lenders, the program is based on “triangulation” through commercial banks, and merely replaces another program that offered a 6 percent government guarantee to homebuilders.

“We’ll have to wait and see if there really is enough of an incentive for financial institutions [to lend to developers] because they are facing a sector that has margin pressures and balance sheet problems.”

Nevertheless, shares in Mexican homebuilding companies soared after the government announced the plan.

Urbi rose more than 18 percent, even after the stock exchange halted trading in its shares due to their steep ascent.

“The [government] guarantees give additional certainty to developers, and serve as a catalyst for the return to normality in bank financing,” Antonio Jorge, Urbi’s director of investor relations, said in a statement.

Fellow homebuilder Geo rose more than 14 percent, while Homex added over 13 percent.

The Habita index, which groups homebuilders, added more than 11 percent.