Texan by Nature is excited to recognize  North American Development Bank (NADBank) as a 2023 TxN 20 honoree for their leadership in conservation and sustainability. NADBank’s commitment to conservation, their projects, programs, best practices, and lessons learned are an example and inspiration for us all.

Honoree Industry and Size: Financial Services – Small

Company Overview
NADBank is a binational financial institution established in 1994 by the Governments of the United States and Mexico to provide financing to support the development and implementation of infrastructure projects, as well as to provide technical and other assistance for projects and actions that preserve, protect, or enhance the environment in order to advance the well-being of the people of the United States and Mexico. 

What is NADBank’s conservation and sustainability mission and why is it important to your culture
NADBank is dedicated to supporting the sustainable development of the U.S.-Mexico border region. Our commitment to this goal requires strong relationships and collaboration to achieve long-term environmental investments in an economically and culturally dynamic region.

The Bank’s core values include client focus, transparency and accountability, quality, integrity, and sustainability. Under sustainability, we actively promote sustainability and knowledge so as to ensure that the future of border communities is better than today and that our ability to serve is preserved.

Sustainability is at the core of the work and culture of NADBank as we work to accomplish our vision and mission. 

Vision
NADBank is a leader in binational cooperation, catalyzing environmental infrastructure investments to achieve sustainable development in the communities it serves through exemplary and innovative financial, technical and environmental solutions of the highest standards.

Mission
NADBank provides financing to support the development and implementation of environmental infrastructure projects, as well as technical and other assistance for projects and actions that help preserve, protect and enhance the environment of the border region in order to advance the well-being of the people of the United States and Mexico.

Transparency and Accountability
We share and handle information in an open, inclusive, clear and responsible manner, and are answerable to ourselves and our stakeholders for our actions. We are good stewards of public funds.

Sustainability
We promote sustainability and knowledge so as to ensure that the future of border communities is better than today, and our ability to serve is preserved.

How is conservation and sustainability a part of NADBank’s business strategy?
Per our mandate, all NADBank-funded projects must have an environmental benefit. Most of these projects also have a climate-specific benefit. NADBank has determined that: 1

All of its renewable energy projects have a clear mitigation benefit; many water-related projects have a clear adaptation benefit, such as flood control and water conservation, and the remaining water projects have some level of a mitigation or adaptation component. 

Under this classification, 59% of investments made in infrastructure projects already in operation have a direct climate benefit, while an additional 28% have less direct benefits related to water. Read more in our annual report.

Additionally, last year, The Bank created and launched its Green Loan Program, which is designed to finance environmental sustainability for small, rural and other borrowers with limited access to NADBank financing through loans to financial intermediaries. Many small, rural and other borrowers in the border region lack access to adequate financing to invest in improving their environmental sustainability. To address this gap, the Board of Directors approved the Green Loan Program with a financing commitment of up to US$300 million, along with its Green Loan Framework that establishes eligibility requirements and expected environmental benefits of these projects.  

Over the last few years, NADBank’s strategic direction has been sharpened to focus on sustainable investments that help develop the border region while combating and mitigating climate change, in coordination with public and private sector sponsors, no matter how big or small. We believe that our Green Loan Program will help build a new market for the Bank, where access to financing for small-scale green projects is more challenging.

– Calixto Mateos Hanel, Managing Director at NADBank

What are NADBank’s short and long-term goals as they relate to conservation and sustainability?
NADBank’s short- and long-term goals continue to be financing sustainable infrastructure projects that provide environmental benefits while also improving the quality of life for U.S.-Mexico border residents.

We work closely with public and private project sponsors to structure appropriate and affordable financing packages that meet the specific needs of each community or project. In addition to loans, NADBank offers grants through its Community Assistance Program (CAP), as well as administers grants from other entities. Likewise, it provides and administers technical assistance for studies and other activities to support the development and long-term sustainability of those projects. 

The unifying factor is that all funded projects must be environmentally-friendly by either preventing or reducing contaminants, which is a requirement of the bank’s founding charter. 

To address current environmental issues and concerns, the Board of Directors of the North American Development Bank (NADBank) agreed to complement the Bank’s current lending portfolio with investments in the following sectors, where the Bank has started financing projects, that will help tackle climate change and promote the green economy:

Sustainable energy: Renewable energy generation, energy efficiency projects that reduce the carbon footprint of existing infrastructure or operations, and energy storage that reduce the intermittency of renewable energy generating assets or enhance grid stability, resiliency, and reliability.

Urban development: Projects that promote sustainable urban planning, design, and development, such as low-impact and green infrastructure; sustainable land development (mixed-use, re-densification, transport-oriented development) and “smart city” elements to improve sustainability.

Sustainable buildings and industrial parks: Construction or retrofitting of industrial parks and residential, institutional, commercial or industrial buildings with more efficient technologies that reduce energy or water consumption, greenhouse gas emissions or waste generation.

Green manufacturing and products: Investments in facilities and equipment that reduce the environmental impact of manufacturing processes by increasing energy efficiency, conserving or reusing water, reducing or recycling waste and minimizing pollution. Manufacture of green products that use fewer natural resources or produce less pollution during their life cycle, when compared to conventional products.

Sustainable food value chains: Investments in agricultural practices or equipment that reduce the use of water, energy, fertilizers or pesticides; investments in agricultural practices or equipment that reduce erosion, runoff, greenhouse gas emissions and/or other forms of pollution or environmental degradation; and investments to reduce the use of resources or the generation of waste during food processing, packaging, storage, transportation, distribution and commercialization.

Climate change adaptation and resilience: Investments in low-impact, green or gray infrastructure designed to diversify and/or drought-proof water supplies, increase flood protection and/or adapt to more severe heat waves.

Who at NADBank is leading your conservation and sustainability efforts and what are some examples of employee engagement in conservation and sustainability at your company?

Salvador Lopez, NADBank’s CEVO

The Bank’s Management team is led by a group of highly experienced professionals committed to fulfilling NADBank’s mission as a leader in binational cooperation aimed at catalyzing environmental infrastructure investments and achieving sustainable development in the communities it serves. 

Since 2017, Salvador López-Córdova,  the first Chief Environmental Officer (CEVO) of NADBank, leads the Bank’s conservation and sustainability efforts. He is responsible for overseeing the environmental integrity of the operations of the Bank and the projects being considered for financing. The CEVO position is part of the Bank’s three-person management team. Salvador has more than 20 years of professional experience in environmental, water, and other sustainability efforts, including significant experience along the U.S.-Mexico border region.

During one of its semi-annual meeting in 2022, NADBank Chief Environmental Officer Salvador Lopez Cordova noted that

The diversity of the projects approved—wastewater collection, solar energy generation coupled with battery storage, and an international border crossing to reduce air emissions—reflect our commitment to financial innovation aimed at improving the environment and quality of life of the border region, as well as supporting its transition to a greener economy. 

-Salvador Lopez Cordova, Chief Environmental Officer at NADBank, noted during one of NADBank’s semi-annual meetings in 2022

Since 2020, the Bank has relied on an employee led initiative to provide recommendations and lead efforts in reducing waste, improving efficiency, and protecting employee health.  The Sustainability workgroup, which has members from each department, works updating and maintaining internal recycling efforts as well as developing new guidelines.  

The sustainability workgroup is currently working in the implementation of new measures to revalidate the REworksSA certification awarded to the Bank by the City of San Antonio. ReWorksSA launched in 2018 as a program dedicated to helping local businesses either start or improve recycling programs in the workplace.  

This group along with the Bank’s Administrative Department also worked with the City of San Antonio to change all office light switches to motion sensors, which will help conserve energy in the building. 

The sustainability team was instrumental in setting up the purchase of carbon offsets for each flight that NADBank staff takes on work-related travel. Carbon offsets are voluntary schemes whereby people pay to offset or make up for the emissions their flights produce. 

In addition, workgroup members are encouraged and recognized for completing certification programs like the CSR-P Seal certification from the Center for Sustainability and Excellence.  

Outside of the office, staff from the San Antonio office demonstrate their community support by donating their personal time and volunteering at local non-profits such as the Audubon Center where they cleaned up trails and picked up trash along the way.  

Staff from the NADBank’s Juarez office worked together with state leaders to donate water containers for storage to vulnerable families living in the Ciudad Juarez, Chihuahua region.  

Over the last 25 years, the bank has made critical investments in our border communities, everything from new solar plants and wind farms to water treatment facilities and sewer lines. The bank has driven investments that improve air quality and water quality and helped build healthier, safer and more vibrant border communities along our southern border.

 -U.S. Senator John Cornyn

In August, NADBank and U.S. Congressman Henry Cuellar announced $150,000 in grant funds (from NADBank’s technical assistance program) for three binational air quality measurement monitors in Laredo/Nuevo Laredo. The funds were awarded to Texas A&M International University (TAMIU) and the Texas A&M Transportation Institute (TTI) to monitor air quality along heavy truck routes, including along the World Trade Bridge. Pictured here are Cong. Cuellar, Laredo Mayor Victor Trevino, John Beckham from NADBank and representatives from TAMIU and TTI.

We are grateful for the support and the funding our community has received from the NADBank/EPA. Failing septic tanks have long plagued our community and it is with great excitement that we will be connecting all residential households to our new centralized sewer system. Cleaning up this contaminated site is an important step in protecting our children’s health—and the health of all our residents—but it also helps spur development and gets us closer to achieving our goal of constructing a community center.

– Mayor Rachel Quintana, Village of Vinton

What conservation and sustainability programs and projects does NADBank lead and participate in?
Our Green Bond Program has been a fundamental tool for raising capital to implement important projects. It is also part of our commitment to offer genuine climate and environmental investment opportunities to private investors. 

To date, NADBank has issued three green bonds totaling US $478 million that have been fully allocated to 16 eligible projects. All proceeds of the green bonds are managed and allocated to infrastructure projects in accordance with the Bank’s NADBank Green Bond Framework, which was first developed in 2018 and updated in 2020. The framework is consistent with the rules established in the Green Bond Principles by the International Capital Market Association and received a positive second party opinion. Further details on the NADBank Green Bond Program can be found in the 2022 Green Bond Report.

NADBank issued its first green bond in July 2018 for CHF 125 million maturing in 2026. The net proceeds from this issue, equivalent to US$126 million, were allocated to six renewable energy projects. In 2020 NADBank issued two additional green bonds: a CHF 180-million bond maturing in 2028 and a CHF 160-million bond maturing in 2033, equivalent to US$186 and US$166 million, respectively. As of December 2022, all the proceeds from these two issues had been allocated to 15 projects.

To be recognized with the TxN 20 award two years in a row is an endorsement of NADBank’s commitment to the principles of environmental sustainability and transparent management of its financial and investment resources. We are grateful to Texans By Nature for reaffirming our work in the area of sustainability and conservation, while accomplishing our mission to improve the quality of life for U.S.-Mexico border residents.

–Calixto Meteos Hanel, Managing Director at NADBank 

How do you see the future of conservation and sustainability evolving, and what role will NADBank play in that progress?
Pursuing its mission to improve the environment and quality of life for U.S. and Mexican residents in the border region, NADBank will continue to play a leading role in helping communities build climate-resistant infrastructure and transition to a green economy.

In order for the border region to continue to grow, we must have reliable water and energy sources available on both sides of the border. These are the two largest sectors in terms of number of projects and largest percentage currently in the Bank’s portfolio.  As a result of the focus on these two sectors, NADBank is perfectly positioned to continue to help with the sustainable development of the border region.

One example, related to water, where the Bank is diligently working with the City of Nuevo Laredo, which sits directly across the border with Laredo, Texas and the State of Tamaulipas, Mexico to finance infrastructure needed to prevent  transboundary sewage from flowing directly into the Rio Grande River. Earlier this month, NADBank signed a cooperative agreement with Nuevo Laredo and the State of Tamaulipas to outline the $81 million investment needed for the City to reduce transboundary flows into the Rio Grande River and improve water quality for the region for Laredo and all communities downstream.

Another area that we see the future of conservation and sustainability in clean energy is pairing energy storage systems with renewable energy generators. Battery storage capacity helps smooth out the delivery of variable or intermittent resources by storing excess energy produced during periods of high wind or solar output and delivering it during periods of peak electricity demand.  

The Bank’s first solar plus battery storage project, located in Kinney County, Texas, is expected to generate 414.31 gigawatt-hours (GWh) of electricity during the first year of operation, which will help reduce future demand on traditional fossil fuel-based energy production and thus help prevent the emission of greenhouse gases and other pollutants from power generation using fossil fuels. The Battery Energy Storage System (BESS) is expected to store electricity generated by the solar park and/or the Electric Reliability Council of Texas (ERCOT) grid and deliver up to 13.5 GWh of electricity a year, which will allow the system operator to manage the grid more efficiently and reduce the use of ramp-up/ramp-down fossil fuel power generating plants. It will also help integrate the intermittent electricity generated by renewable energy sources, including the solar park, as well as support a more efficient and reliable power grid by minimizing power disruptions and reducing energy losses resulting from mismatches in supply and demand.

How does NADBank quantify investment and return on conservation and sustainability?
The Bank establishes expected investment outcomes and documents achievements, as well as provides substantial project oversight and support throughout the development and implementation process, resulting in highly efficient funds management. For NADBank, it is important to know that the projects it finances are not only completed as designed, but also perform as intended to improve the environment and related health conditions for border residents. NADBank estimates the anticipated impact of the projects to be financed prior to approval and routinely verifies actual project impact after the initiation of operations. 

Key indicators are selected and quantified for each project type. Anticipated impacts are based on many well-researched assumptions (such as production rates, state energy matrices and emission factors) and expected project scope. Through its Results Measurement System, NADBank tracks and evaluates actual project performance and impact with respect to the targets set for environmental results during the approval process. Because of the level of due diligence performed by NADBank during that process, the actual results of most projects are reasonably close to those anticipated at approval.

The Results Measurement System consists of two components: a closeout process conducted after the project has been in operation for a year and a more in-depth impact assessment for select projects. The closeout process serves to document and assess the physical facilities built and their performance within a year after initiating operation. It is an effective tool for verifying whether the project was constructed as approved and has been operating as intended.

An impact assessment is performed to ascertain the actual impact of the project on specific environmental and human health indicators in the long-term. It serves to verify whether the project is having an impact beyond its physical outputs and outcomes by providing environmental and health benefits to the intended population.

Examples of these reports are available on the Bank’s website: www.nadb.org.

What is the one lesson that NADBank has learned from your conservation and sustainability efforts that others can take back and think about applying within their own space?
NADBank’s technical assistance program offers up to $250,000 to assist utilities, state and local governments and their agencies with necessary pre-development project costs including studies, engineering, sector studies and/or capacity-building activities. For example, as part of developing the expansion project for the Anzaludas Land Port of Entry, NADBank provided a technical assistance grant of $134,838 to complete the final design for this project. The results of the study illustrated that the expansion would improve air quality and thus made it eligible for a loan. Once completed the Anzalduas International Bridge will serve commercial traffic.

Technical assistance has served as a linchpin for NADBank’s success, advancing its mission by fortifying project sustainability, building the institutional capacities of border communities, generating knowledge on new technologies and emerging issues, and forging strong collaborative relationships among stakeholders at all levels of government, as well as with civil organizations, academia and the private sector. 

Providing financial and technical services to support project planning and design, as well as to strengthen the institutional capacities of those responsible for operating and maintaining the new infrastructure, helps ensure the long-term sustainability of the projects NADBank finances. Although technical assistance represents the NADBank’s smallest proportional investment in a community, it has proven to be the foundation for the successful development and implementation of infrastructure projects.

NADBank also actively pursues opportunities to partner with other public and private organizations to promote and leverage environmental sustainability in the border region. The success of many of its projects and technical assistance initiatives is thanks to the cooperative efforts of various entities coming together to pool, not only their financial resources, but also their technical expertise.  

Sustainability and conservation are possible through these strategic partnerships and most impactful with careful and thoughtful planning.  For the Bank, the sustainability of our programs and projects are possible when all stakeholders share the same goals for the development and implementation of the needed infrastructure.  

Why is Texas an important home or base of operations for NADBank?
NADBank is headquartered in San Antonio and has a satellite office in Ciudad Juarez, Chihuahua, directly across from El Paso. Being based in Texas has provided a project-rich home state. With nearly a 1,255-mile shared border with Mexico, Texas is an optimal location and has benefitted from the Bank’s financing programs. Of the 140 projects located in the U.S., 76 are in Texas and of the US$1.5 billion in funding provided to projects in the U.S., just over half has gone to support projects in Texas (approx. US$750 million).  

Learn more about NADBank’s conservation and sustainability efforts here.