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NAD Bank announces 13 water and wastewater projects to be funded with green financing

  • NAD Bank announces 13 water and wastewater projects to be funded with green financing

Projects include the rehabilitation of the San Antonio de los Buenos Wastewater Treatment Plant in Tijuana, which will help minimize untreated discharges to the Pacific Ocean within the U.S. territory.

A Technical Investment Committee has been established to ensure transparency in the allocation and implementation of the funds.

About the entity

North American Development Bank NADB
NADB is a binational financial institution established by the Governments of the United States and Mexico to provide financing to support the development and implementation of infrastructure projects.

The first 13 water infrastructure projects to be funded with the proceeds of the sustainability financing executed by State of Baja California have been selected and approved to begin implementation in five of the state’s seven municipalities. These projects will help prevent wastewater leaks and spills, thereby significantly reducing the risk of human contact with raw sewage and the potential contamination of surface and groundwater, as well as transboundary flows into the United States. They will also improve the quality of drinking water services for thousands of residents, thus addressing the historic backlog in water infrastructure in the state.

The announcement was made at a working meeting headed by the Undersecretary of Finance and Public Credit of the Ministry of Finance and Public Credit, Gabriel Yorio González, with the participation of the Deputy Managing Director of the North American Development Bank (NADBank), John Beckham, as well as the Secretary of Finance of the State of Baja California, Marco Antonio Moreno Mexía, who presented the work plan and list of 13 projects selected to receive green financing in this first phase.

In this regard, Marco Moreno, Secretary of Finance for Baja California noted that “as instructed by Governor Marina del Pilar Avila Olmeda, we completed the selection process to award financing to the first water infrastructure projects. To guarantee the selection, execution, management and development of the projects are carried out in accordance with the provisions of the Baja California Sustainability Financing/Bond Framework, the Technical Investment Committee was established, which operates as a collegiate body to ensure transparency in the use of the funds.”

The Technical Investment Committee is in charge of reviewing the project information, including drinking water infrastructure and, when applicable, ensuring that those projects have access to sewer systems and wastewater collection and treatment processes, as well as the reports from the borrower and independent consultant (funded by NADBank) for the purpose of validating their compliance with the provisions of the decree, the Sustainability Framework, the technical assistance agreement and the financing agreements throughout project implementation, prioritizing the greatest return and seeking to generate a positive impact for the benefit of the state population.

The first 13 water infrastructure projects to be funded with the proceeds of the sustainability financing executed by State of Baja California have been selected and approved

The projects comply with the Sustainability Financing Framework established in December 2022 by the State of Baja California, which is aimed at identifying and channeling the necessary funding to sustainable projects, as well as making sure its purpose of benefitting both the environment and society is effectively met.

In addition to the San Antonio de los Buenos Wastewater Treatment Plant (WWTP) that serves Tijuana and Playas de Rosarito, funding will also be provided for the rehabilitation of the Abelardo R. Rodriguez Water Treatment Plant, the aqueduct from the Abelardo R. Rodríguez Dam to the Morelos water tank and the Rosarito North WWTP in those two communities. Funding will also be provided to build the new Voluntad force main in Mexicali, replace waterlines in seven neighborhoods in Ensenada, and expand the La Nopalera Water Treatment Plant in Tecate.

The total cost of these projects is $794 million pesos, which will be covered with the proceeds of the first green loan for one billion pesos executed by NADBank and the Government of Baja California.

The water utility in each municipality will be in charge of carrying out the projects in its service area through an agreement establishing its commitments to repay the financing to the State and meet certain operational and commercial performance goals aimed at strengthening its institutional and financial capacities to support its long-term sustainability.

“We congratulate the Government of Baja California for its commitment to this innovative credit instrument that will help close the gap in unmet water infrastructure needs in the state, as well as support climate change adaptation and mitigation measures in the water sector,” stated the NADBank Deputy Managing Director. Likewise, he added that “these works will help minimize cross-border flows of untreated wastewater to shared U.S. and Mexican water sources, benefitting the environment for millions of residents of both countries.”

The green financing is part of the “Sustainability Bond Framework of the State of Baja California,” which is based on the general climate change strategy and social policies at both the state and country level and is aligned with the Sustainable Development Goals (SDG), which were adopted by the United Nations in 2015 as a universal call to end poverty, protect the planet and ensure that all people may enjoy peace and prosperity by 2030.

In March 2023, NADBank and the Government of Baja California executed agreements totaling $3 billion pesos in green financing aimed at reversing water infrastructure deficiencies in communities in Baja California.

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