COVID-19 relief: Binational bank OKs $21.5M for water improvement projects on the border

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New umbrella program helps 'expedite approvals' for public utilities

Tumble weeds lie in a canal next to the U.S.-Mexico border fence on February 01, 2019 in El Paso, Texas. (Photo by John Moore/Getty Images)

McALLEN, Texas (Border Report) — The North American Development Bank has approved $21.5 million worth of water infrastructure-related improvement projects for five U.S. and Mexican communities to help hundreds of thousands of residents on both sides of the border during this coronavirus pandemic.

During an online meeting on Nov. 12, the the NABD board of directors approved the five environmental projects, including the appropriation of substantial funds for two South Texas-related water systems.

These NABD projects include:

  • $13 million for debt refinancing for the South Texas Agua SUD (Special Utility District) to aid the utility’s operations in Starr and Hidalgo counties, which could save local taxpayers $140,000 annually.
  • A $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.
  • Grants of $500,000 each to the communities of Socorro, Texas, and Agua Prieta, Sonora, Mexico, through the bank’s Community Assistance Program (CAP) for their respective wastewater projects
  • A $1.02 million grant for the water utility in Ojinaga, Chihuahua, Mexico, from the Border Environment Infrastructure Fund, which is funded by the U.S. Environmental Protection Agency and administered by NADB. The grant will improve wastewater collection infrastructure, reducing the risk of pipeline failure and eliminating approximately 281,000 gallons per day of untreated wastewater.

The refinancing funds for Agua SUD were part of the binational financial institution’s board approving an umbrella program to expedite the refinancing of existing debt for public entities affected by COVID-19. The umbrella program will allow the bank to consider proposals from public utilities of up to $20 million if the public utility meets certain environmental criteria. This is part of the two-year COVID-19 Recovery Program (ProRec) “for 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,” the organization said.

The COVID-19 recovery program was first established by the board in May, but the system needed to be streamlined for easier access by border communities and that’s what this umbrella program allows, Jesse Hereford, NABD public affairs director, told Border Report on Friday.

“We noticed in the U.S. and Texas border there were a lot of communities looking to refinance existing debt and so we went back to this board meeting with the umbrella program, which allows us to expedite the approvals for communities or water utilities to refinance existing debt,” Hereford said.

The projects must be environmental-related and involve water or wastewater to be considered, he said.

The North American Development Bank, which is established and capitalized in equal parts by the United States and Mexico to help finance environmental infrastructure projects along the common border, has been focusing on developing environmentally and financially sustainable projects with buy-in from local communities on both sides of the border since its inception in 1993 and is “the first green bank ever created,” Hereford said..

In approving these projects, the board of directors is sending a strong message of the need to help border communities in both countries during this coronavirus pandemic, bank leaders said.

Public entities that meet eligibility criteria will be able “to free up cash flows that can be redirected to support public services and mitigate the effects of the pandemic,” NADB Managing Director Calixto Mateos-Hanel said.

Agua SUD is the first utility to access these ProRec funds, which are expected to save taxpayers at least $140,000 each year over first 13 years of the 30 year-loan.

ProRec has $185 million allocated for loans and up to $15 million for technical assistance.

U.S. Rep. Henry Cuellar, D-Texas, praised the new umbrella program that he told directors on Nov. 12 will rush aid to border communities.

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