Wednesday, July 8, 2020

$200M for Newly Approved COVID-19 Recovery Border Program

NADB Board of Directors approves COVID-19 Recovery Program to support border communities and a new project during semi-annual meeting.

  • Virtual meeting held via webinar with almost 200 participants
  • COVID-19 response program approved to support border communities
  • US$3.4 million in financing approved for an environmental project in Mexico

NADB Board at November 2019 meeting

The Board of Directors of the North American Development Bank (NADB), which held its first semiannual meeting of 2020 electronically, announced the approval of a temporary financing program in response to the effects of the COVID-19 pandemic to support projects that have both environmental benefits and direct positive impacts on the economy of the U.S.-Mexico border region and the health and well-being of border residents. The program will provide as much as US$200 million and includes up to US$15 million in technical assistance.

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Within the new program, the Board of Directors may consider approval of loan proposals:

  • Under a programmatic approach, whereby environmental infrastructure projects with similar characteristics may be financed by NADB pursuant to a single certification;
  • To refinance existing debt on environmental infrastructure or public entities, such as water utilities, whose mandate is aligned with the Bank’s mission; and
  • To support the development and financing of projects with environmental benefits that promote the creation or preservation of jobs, betterment of health and/or health services, or improvement of technological connectivity and access to information in times of environmental and health catastrophes.

The Board also approved an environmental infrastructure project in Mexicali, Baja California representing a total investment of US$6.8 million.

During the meeting, the Board, led by representatives of the U.S. Department of the Treasury and the Mexican Ministry of Finance and Public Credit, also reported that the United States recently made its initial contribution of capital pursuant to NADB’s first capital increase, subscribing to US$10 million in paid-in capital and US $56.67 million in callable capital. With this subscription, the U.S. matched the initial amount contributed by Mexico in September 2016. In the context of the first capital increase of the Bank, both parties have committed to continue making the relevant contributions in the coming years to strengthen the Bank.

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“The actions taken by the Board today reflect the confidence that both governments have in NADB and its ability to carry out its mission of assisting border communities with their environmental projects,” stated NADB Managing Director Calixto Mateos-Hanel. “Thanks to the governments’ commitments to fund the Bank’s first capital increase, along with strong risk management practices and conservative liquidity requirements, NADB’s ratings from Fitch and Moody’s remain strong, enabling it to deal with the new global economic reality and finance projects that support the environment, health and economies of communities located in the border region.”

With respect to the project approved, the Wastewater Collection System (Phase I) and Lift Station Improvements in Mexicali, Baja California, consists of replacing 38,583 feet of deteriorated pipelines and rehabilitating three lift stations in the wastewater collection system. This will reduce the risk of line breaks that could cause approximately 33.1 million gallons per day of uncontrolled wastewater discharges to the New River, which flows into the United States. The local water utility, Comisión de Servicios Públicos de Mexicali (CESPM), will receive a US$3.4 million grant from the Border Environment Infrastructure Fund (BEIF), which is funded by the U.S. Environmental Protection Agency (EPA) and administered by NADB.

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“The Mexicali project addresses a significant risk of failure in the wastewater collection system, reducing the risk of exposure to raw wastewater and benefitting 557,000 residents of Mexicali, as well as contaminated flows to the New River,” stated NADB Chief Environmental Officer, Salvador López.

Given the travel restrictions and social distancing requirements deriving from the COVID-19 pandemic, the NADB Board decided to use a virtual meeting platform to hold the public meeting. Close to 200 people from various communities on both side of the U.S.-Mexico border registered to connect to the meeting on line.

In over 25 years of operation, the Bank has approved loans and grants to support the implementation of infrastructure projects representing a total investment of close to US$10 billion in benefit of approximately 18 million residents on both sides of the U.S.-Mexico border.

 

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Managing Editor
Originally from upstate New York, Dani Schwartz has lived in Coronado since 1996. She is thrilled to call Coronado home and raise her two children here. In her free time enjoys hitting the gym, reading, and walking her dog around the “island.”Have news to share? Send tips, story ideas or letters to the editor to: manager@coronadotimes.com
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