June 30, 2000

The North American Development Bank to Provide $49.2 Million in Grant Assistance

San Antonio — The North American Development Bank (NADB), through its EPA-funded Border Environment Infrastructure Fund (BEIF), will provide $49.2 million in grant assistance to the communities of Nogales, Arizona; Nogales, Sonora; San Luis Rio Colorado, Sonora; and Tecate, Baja California. In addition, the NADB will also make $9.2 million in loans available to assist in financing infrastructure projects in San Luis Rio Colorado, Tecate, and Allende and Morales, Coahuila.

Nogales, AZ: Residents of the sister cities of Nogales, Arizona and Nogales, Sonora, will benefit directly from a $46 million project designed to rehabilitate and expand their shared sanitation system. BEIF funds totaling $38.6 million will be applied to the overall construction budget for infrastructure costs shared between the two communities. An additional $683,492 in BEIF funds will be provided to Nogales, Arizona for transition assistance to allow residents to adjust over time to necessary increases in water and wastewater rates. Up to $250,000 will be set aside for construction management assistance.

San Luis Rio Colorado, Son.: BEIF funds totaling $5.9 million will be dedicated to a project aimed at improving the sewer and sanitation services in this community. Specifically, $5.7 million will be applied to the construction budget, while the remaining $200,000 is earmarked for construction management assistance. The NADB will also provide a $2 million loan.

Currently, 36.7 percent of the residents receive sewage collection services. This project is part of a master plan what will eventually allow 85 to 90 percent of the (expected) population to receive sanitation and sewer services.

The development of this project will prevent contaminants from flowing into the Colorado River and the Colorado River Delta Desert Wetlands. Furthermore, it will remove the threat of untreated sewage from entering the aquifer, which is also shared by residents in Yuma and San Luis, Arizona.

Tecate, BC: BEIF funds totaling $3.7 million will be used in financing Phases II and III of a project designed to improve the city's potable water system and the collection and treatment of raw sewage. This project is timely since the community's population growth rate has much exceeded construction of additional environmental infrastructure, particularly in the areas of water distribution, sanitary sewerage and sewage treatment. Specifically, $3.6 million will be directed to the construction budget, while the remaining $150,000 will be utilized for construction management assistance. An additional $626,230 will be provided through a NADB loan.

Allende and Morelos, COAII: The NADB will provide a $6.5 million loan to Industrial Papelera Solar (Grupo Solar) to construct a paper recycling plant and a wastewater treatment plant with a capacity of 100 liters per second (1/s) (2.3 million gallons per day (mgd). This project is significant to the communities of Allende and Morelos since they currently do not have a system for treating collected wastewater. The proposed wastewater treatment plant will treat the water from the recycling plant, as well as the collected wastewater from the two communities. Grupo Solar will absorb the costs of treating the wastewater from the communities.

"These projects are great examples of the work that still needs to be done along the border," said Victor Miramontes, NADB's managing director. "These projects also demonstrate the dedication of the communities to developing infrastructure projects to improve their quality of life now, and for future generations to come. I am happy to see the NADBank being a part of that quality of life improvement."

The Border Environment Cooperation Commission (BECC) certified these pro-jects on June 22, 2000.

Established in 1997, the BEIF is a grant program administered by the NADB to facilitate environmental infrastructure projects throughout the U.S.-Mexico border region. EPA provide an initial contribution of $170 million for water and wastewater projects with an additional $41 million added to the fund by EPA in 1999. More than $205 million in BEIF assistance has been approved to date.

The North American Development Bank, created under the auspice of NAFTA, 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 integrated, sustainable and fiscally responsible projects with broad community support in a framework of close cooperation and coordination between Mexico and the United States.

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