San Antonio, TX – During its second virtual public meeting of 2020, the Board of Directors of the North American Development Bank (NADB) announced the approval of five new environmental projects that represent a total investment of US$21.5 million. NADB will provide US$19.3 million in loan and grant financing for these projects that will benefit close to 137,500 residents on both sides of the U.S.-Mexico border region.
The Board also announced the approval of an umbrella program to expedite the refinancing of existing debt for public entities affected by COVID-19. The program establishes the guidelines and expedited procedures for the certification and financing of these types of operations, which in general have similar characteristics. Proposals from public entities for refinancing up to US$20 million that meet certain criteria will be eligible for consideration under the umbrella program.
The umbrella program is part of the two-year COVID-19 Recovery Program (ProRec), approved by the Board in May 2020 in response to the effects of the COVID-19 pandemic. ProRec supports projects that have both environmental benefits and direct positive impacts on the economy and the health and well-being of border residents in both countries. ProRec has US$185 million allocated for loans and up to US$15 million for technical assistance.
Calixto Mateos-Hanel, NADB Managing Director, said that “the objective of the umbrella program is to expedite the approval of refinancing proposals for public entities that meet the eligibility criteria in order to free up cash flows that can be redirected to support public services and mitigate the effects of the pandemic.” In this regard, he reported that to date three projects have been approved under the ProRec program “including the project certified today for the Agua Special Utility District (Agua SUD), which serves Hidalgo and Starr Counties in Texas.”
Of the five projects approved this morning, four are related to water infrastructure improvements and represent a total investment of US$8.45 million. NADB will provide a US$4.26 million loan to Jim Hogg County, Texas, for the replacement of a water treatment plant and upgrades to water meters for the entire city of Hebbronville. The communities of Socorro, Texas and Agua Prieta, Sonora, will each receive a US$500,000 grant through the Bank’s Community Assistance Program (CAP) for their respective wastewater projects. The water utility in Ojinaga, Chihuahua will receive a $1.02 million grant from the Border Environment Infrastructure Fund (BEIF), which is funded by the U.S. Environmental Protection Agency (EPA) and administered by NADB. The BEIF grant will support improvements to wastewater collection infrastructure, reducing the risk of pipeline failure and eliminating approximately 281,000 gallons per day of untreated wastewater.
The fifth project consists of a US$13 million debt refinancing project for Agua SUD, which will result in annual savings of roughly US$140,000 for the utility during the first 13 years of amortization and increase available cash flows for the maintenance and operation of existing water and wastewater infrastructure. It’s the first project under the ProRec umbrella program, approved today by the Board of Directors.
The Board was also pleased to announce the publication of an environmental impact report marking the 25th anniversary of NADB. Over the first 25 years of operation, NADB has supported the implementation of 268 environmental infrastructure projects, of which 236 were in operation at the close of 2019. The completed projects represent a total investment of US$9.53 billion, with US$2.99 billion financed through loans and grants from the Bank.
Among the results reported, the support provided and significant advances made in the water sector in the Mexican border states stand out, with drinking water service coverage increasing from 86% to 96%, wastewater collection services increasing from 77% to 95%, and wastewater treatment coverage increasing from 21% to 91%. Moreover, in the renewable energy sector, NADB has participated in the construction of 34 projects with a combined generation capacity of 2,861 MW on both sides of the border. In Mexico it should be noted that the Bank has participated in the financing of 92% of current generation capacity in renewables (wind, solar and biogas) in the Mexican border states. The report can be accessed electronically at the following link: https://www.nadb.org/knowledge-resources/studies-publications/25-years-of-green-investments-in-communities-in-the-us-mexico-border-region/
Salvador López-Córdova, NADB Chief Environmental Officer, stated that “these achievements have been made possible thanks to the guidance and ongoing support of the NADB Board of Directors, the dedication of Bank staff and the collaboration of many border stakeholders, in particular municipal and state governments in both countries,” adding that “although significant progress has been made, challenges remain, and thus NADB will continue to promote the sustainability and development of the U.S.-Mexico border region.”
NADB is a financial institution established and capitalized in equal parts by the United States and Mexico for the purpose of financing environmental infrastructure projects along their common border. As a pioneer institution in its field, the Bank is working to develop environmentally and financially sustainable projects with broad community support in a framework of close cooperation and coordination between Mexico and the United States.