Greening the Border: The role of the North American Development Bank May 16, 2018

NADB Established in 1994 Mandate: Develop and finance environmental infrastructure along the U.S.-Mexico border: Review and certify infrastructure projects located within 100 km north and 300 km south of the border that improve the well-being of the population Provide loans and grants for their implementation Offer technical assistance for project development NADB and BECC merged in November 2017 Structure: Owned and governed equally by the Governments of the United States and Mexico Offices: San Antonio, TX and Ciudad Juarez, Chihuahua Ratings: Aa1 - Moody's; AA – Fitch

Governance Board of Directors NADB has a ten-member Board of Directors, with an equal number of representatives from the U.S. and Mexico U.S. Members Mexico Members Secretary of the Treasury Secretary of Finance and Public Credit (SHCP) Secretary of State Secretary of Foreign Affairs (SRE) Administrator of the Environmental Protection Agency Secretary of the Environment and Natural Resources (SEMARNAT) U.S. Border State Representative Mexican Border State Representative U.S. Border Public Representative Mexican Border Public Representative

Jurisdiction U.S.- Mexico Border Region Eligible projects must be located within 100 km (62 miles) north and 300 km (186 miles) south of the U.S.-Mexico border U.S.A. State Counties Population Arizona 6 0.91 m. California 3 3.20 m. New Mexico 5 0.18 m. Texas 27 2.05 m. Total 41 6.34 m. California New Mexico Arizona 100 km (62 miles) 300 km (186 miles) Baja California Sonora Texas Chihuahua Sources: U.S. Census Bureau and its Mexican counterpart, the National Institute of Statistics and Geography (INEGI). Coahuila Mexico State Municipalities Pop. Baja California 5 3.15 m. Chihuahua 44 2.97 m. Coahuila 35 1.77 m. Nuevo León 50 4.61 m. Sonora 57 1.65 m. Tamaulipas 29 2.25 m. Total 220 16.41 m. Nuevo León Tamaulipas

Residential, Industrial and Hazardous Waste Eligible Sectors Types of Projects Water and Sewage Residential, Industrial and Hazardous Waste Air Quality Clean / Renewable Energy Energy Efficiency Water treatment and distribution Wastewater collection, treatment and reuse Water conservation Storm drainage Sanitary landfills Collection & disposal equipment Dumpsite closure Recycling Site remediation Toxic waste disposal Street paving and other roadway improvements Ports of entry Public transportation Industrial emissions Solar Wind Biofuels Biogas/methane capture Hydroelectric Geothermal Public lighting Building retrofits Equipment replacement Water utilities

Programs Project Financing and Technical Assistance Loans Grants Up to 85% of project costs Competitive fixed or floating rates Terms of up to 25 years Technical support and project structuring services Limited grants for communities where debt financing is not a viable option: EPA-funded Border Environment Infrastructure Fund (BEIF) NADB-funded Community Assistance Program (CAP) Support for project development: Final design and related studies Financial closing Procurement Capacity-building through seminars and workshops

Value-added Benefits of Collaborating with NADB Certification & Financing Process: Technical/financial review and support with project structuring Transparency / public access to information Procurement and construction oversight Results measurement Institutional Strengthening: Access to technical assistance and training programs Hands-on project facilitation – a partner in project development, streamlining interaction between project sponsors and relevant public authorities Public Policy Support: Strategic planning studies to enhance sector opportunities Affordable Financing Packages: Competitive rates; long-term loans; tailored to specific needs of community and project

Leveraging Infrastructure Investments December 31, 2017 With an initial $405 million in paid-in capital contributions from the U.S. and Mexico, NADB has leveraged investments totaling $8.20 billion in the development of sustainable infrastructure. Initial Partner Contributions Total Leveraged Investment 1:20 ratio $202.5 M Paid-in $1,147.5 M Callable $202.5 M Paid-in $1,147.5 M Callable $0.405 billion in NADB paid-capital $2.35 billion in loans & grants for 166 projects $8.20 billion total investment in infrastructure NADB has also managed $658.7 million in EPA grants for 78 additional projects, bringing total infrastructure investment to $9.31 billion benefitting more than 17 million residents.

Certified Projects with Financing December 31, 2017 California Arizona New Mexico Texas US Border Region 25 projects $1,177.5 21 projects $384.4 11 projects $80.5 55 projects $1,767.0 Projects: 244 1 project $63.0 2 projects $49.2 Total investment: US$9.31 billion MX Border Region Note: Only projects with NADB funding contracted. $48.4 million cost of border-wide projects is distributed among the four states where they have been implemented to date: $13.5 million in Chihuahua; $9.3 million in Sonora; $18.8 million in Nuevo Leon and US$6.8 million in Baja California. 29 projects $1,343.5 28 projects $573.1 30 projects $666.4 10 projects $594.7 11 projects $1,187.0 21 projects $ 1,428.4 Baja California Sonora Chihuahua Coahuila Nuevo León Tamaulipas

Certified & Funded Projects by Sector December 31, 2017 244 Projects US$9.31 billion Total investment Note: Only projects with NADB funding contracted.

Cumulative Financing December 31, 2017 US$3.00 billion contracted to support 244 projects US$2.25 billion in loans US$0.75 billion in grants

Outputs of Completed Projects As of December 31, 2017 22 water treatment plants and 37 water distribution systems 53 wastewater treatment plants and 89 wastewater collection systems 22 water conservation projects 14 municipal landfills built or expanded and 12 dump sites closed 7.19 million square meters of roads paved and 229 km of rehabilitated roadways 15 solar plants, 12 wind farms, 1 landfill waste- to-energy facility and 1 cogeneration facility, with 1,917 MW of renewable energy generation capacity installed

Projects supported in Texas December 31, 2017 61 projects certified and financed 55 projects completed US$604.4 million in financing contracted US$596.0 million disbursed (98.6%) US$ Million County No. of Projects Financing Contracted Brewster 1 $ 1.36 Cameron 14 222.87 El Paso 12 120.94 Hidalgo 16 49.17 Jim Hogg 0.45 Kinney 40.00 Maverick 2 14.11 Presidio 30.96 Starr 3 5.65 Terrell 0.28 Uvalde 0.50 Val Verde 4 49.07 Webb 7.88 Willacy 61.17 Note: Texas plan counted as seven separate projects.

Impact of projects inTexas December 31, 2017 71.8 million gallons a day (mgd) of new water treatment capacity 14.7 mgd of increased wastewater treatment capacity 53,754 acre-feet/year in water savings in irrigation districts 601 MW of installed solar and wind generation capacity, which is helping prevent the emission of approximately 1.27 million metric tons/year of CO2, equivalent to removing 272,672 passenger vehicles from the roadways 2 landfills expanded, and repair of a closed landfill damaged by flooding

Water Conservation Infrastructure in Texas Irrigation Districts $22.9 million in grants provided by NADB for 16 projects with total cost of $56.2 million 53,754 acre-feet/year in water savings in irrigation districts Several projects in Texas are also saving energy by installing energy- efficient equipment and implementing other water management improvements. Altogether, those districts expect to save an estimated 7,159,182 kilowatts-hours a year.

Case Study Hidalgo and Cameron Counties Irrigation District No. 9 Water Conservation Improvements NADB Grant: US$1.25 million The Anacuitas Aqueduct, managed by Hidalgo and Cameron Counties Irrigation District No. 9, delivers 388 million gallons a day (mgd) of raw water from the Rio Grande to the cities of Elsa, Edcouch, La Villa, Mercedes, and Weslaco, as well as to an estimated 350 agricultural accounts in the far western portion of Cameron County and the eastern portion of Hidalgo County. Inaugurated in June 2015, the new 290-foot aqueduct replaced the old concrete structure built over 100 years ago and is expected to reduce water losses from spills and leaks, in addition to providing a reliable water supply system for more than 65,000 people.

Participation in Texas Western and Central Counties El Paso 2 W, 1 WW, 1 SD, 1 Biofuel Cuadrilla 1 WW Vista del Este 1 W El Paso Hudspeth Culberson Socorro (Cotton Valley) 1 WW Del Rio 1 W, 1 SW Rocksprings 1 Wind Tornillo 1 W, 1 WW Pecos Brackettville 1 Solar Jeff Davis Clint 1 WW Fabens 1 W/WW Terrell Presidio Uvalde 1 SW Val Verde Edwards Brewster Sanderson 1 WW Kinney Uvalde Presidio 1 Solar Maverick Zavala Marathon 1 W/WW Eagle Pass 1 W/WW Dimmit Maverick Co. 1 WC SD = Storm drainage SW = Solid waste W = Water WC = Water conservation WW = Wastewater

Participation in Texas Southern Counties I.D. = Irrigation District SW = Solid waste W = Water WC = Water conservation WW = Wastewater Duval Jim Hogg Co. 1 SW Webb Engelman I.D. No. 6 1 WC Laredo 1 W/WW Raymondville 1 W Willacy & Cameron Co. 2 Wind (Los Vientos I & II) Zapata J. Hogg Starr Co. 1 SW Texas Plan: Combes, Primera, San Benito 3 W / WW Roma 1 W/WW Starr Hidalgo Santa Rosa 1 W / WW Willacy Rio Grande City 1 WW San Benito 1 W / WW Hidalgo I.D. No. 1 1 WC Hidalgo I.D. No. 2 3 WC Hidalgo I.D. No. 6 1 WC Hidalgo I.D. No. 16 1 WC Hidalgo-Cameron I.D. No. 9 Cameron Harlingen I.D. No. 1 1 WC Pharr 1 WW Alton 1 WW Brownsville 1 WW Mercedes 1 W / WW Donna 1 W / WW Brownsville I.D. 1 WC Delta Lake I.D. 1 WC Cameron Co. I.D. No. 2 1 WC La Feria 1 W / WW North Alamo WSC 1 WW Cameron Co. I.D. No. 6 1 WC Valley Municipal No. 2 1 WC

Participation in Texas December 31, 2017 El Paso 2 W, 1 WW, 1 SD, 1 Biofuel Cuadrilla 1 WW Vista del Este 1 W El Paso Hudspeth Culberson Socorro (Cotton Valley) 1 WW Del Rio 1 W, 1 SW Tornillo 1 W, 1 WW Pecos Brackettville 1 Solar Jeff Davis Rocksprings 1 Wind Clint 1 WW Fabens 1 W/WW Terrell Presidio Uvalde 1 SW Val Verde Edwards Brewster Kinney Uvalde Presidio 1 Solar Sanderson 1 WW Zavala Maverick Marathon 1 W/WW Hidalgo I.D. No. 1 1 WC Hidalgo I.D. No. 2 3 WC Hidalgo I.D. No. 6 1 WC Hidalgo I.D. No. 16 1 WC Hidalgo-Cameron I.D. No. 9 Alton 1 WW Donna 1 W / WW Mercedes 1 W / WW Raymondville, 1 W Delta Lake I.D. 1 WC Pharr 1 WW Engelman I.D. No. 6, 1 WC Willacy & Cameron Co. 2 Wind (Los Vientos I & II) La Feria 1 W / WW Texas Plan: Combes, Primera, San Benito 3 W / WW Laredo 1 W/WW Roma, 1 W/WW Starr Co.,1 SW Rio Grande City 1 WW Santa Rosa, 1 W / WW San Benito, 1 W / WW Brownsville I.D., 1 WC Harlingen I.D. No. 1, 1 WC Cameron Co. I.D. No. 2, 1 WC Valley Municipal No. 2, 1 WC Jim Hogg Co. 1 SW Cameron Co. I.D. No. 6, 1 WC Webb Duval Zapata Starr Hidalgo Cameron Willacy J. Hogg Brownsville, 1 WW North Alamo WSC 1 WW Dimmit Eagle Pass 1 W/WW Maverick Co. 1 WC ID = Irrigation District SD = Storm drainage SW = Solid waste W = Water WC = Water conservation WW = Wastewater

Thank you Salvador Lopez Chief Environmental Officer slopez@nadb.org