Texan by Nature is excited to recognize North American Development Bank (NADBank) as a 2024 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 Name: North American Development Bank (NADBank) 

Honoree Industry and Size: Financial Services, Mid-size

Company Overview:
NADBank 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 environmental 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? 

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

– JOHN BECKHAM, MANAGING DIRECTOR, NADBANK

What steps is NADBank taking to address global natural resource challenges, and how are these efforts integrated into your overall 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:  

• 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. NADBank’s short-term and long-term goals continue to be financing sustainable infrastructure projects that provide environmental benefits while also improving the quality of life for the 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 such as the EPA. 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 in NADBank is leading your conservation and sustainability efforts and what are some examples of employee engagement in conservation and sustainability at your company?
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.  

John Beckham, Managing Director of the North American Development Bank 

Upon being appointed Managing Director, John Beckham stated, “I am honored to assume the position of CEO of NADBank and will continue working to advance its environmental mission and consolidate the institution as a binational leader in supporting the transition to a greener economy through innovative financing and more robust partnerships with stakeholders.” 

Mr. Beckham’s appointment coincides with Board approval of the 2024-2028 Strategic Plan, which reaffirms the Bank’s continued focus on investment in water infrastructure to better manage this shared resource along the border and address wastewater problems, as well as reflects the growing binational priority of accelerating investment in greener mobility and the commitment of the United States and Mexico to move towards sustainable development through investments that promote a better quality of life for border residents. 

In this regard, Mr. Beckham noted, “the strategic plan sets ambitious targets for growing the Bank’s project portfolio over the next five years, but with the solid support of its shareholders and Board and the dedication and experience of its staff, the Bank is ready to meet the challenge.”

Salvador Lopez, Chief Environmental Officer, North American Development Bank  

Salvador is responsible for overseeing the environmental integrity of the operations of the Bank and the projects being considered for certification of environmental benefits and financing. 

He has overseen the development of a Green Finance initiative that has led to the development of a Sustainable Finance Framework aligned to international standards, which has been used to issue debt in international markets for $668 million.

In addition, he has led or co-led a number of new initiatives such as the creation of a Green Loan Program to provide financing through financial intermediaries, an ESG risk management system, and the expansion of the types of projects that are eligible for NADBank financing. He has endorsed more than 70 projects with a total investment of $3.1 billion for approval by the Board of Directors.

What conservation and sustainability programs and projects does NADBank lead and participate in?
Green Bonds, a tool to finance environmental infrastructure projects

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 here.

NADBank issued its first green bond in July 2018 for CHF (Swiss Franc) 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.

Sustainable Financing Framework

Building on the success of its Green Bond Program, NADBank has made strategic enhancements to broaden its scope by developing a more comprehensive Sustainable Financing Framework. This updated framework focuses on addressing the critical development challenges facing the border region, which are at the core of the Bank’s environmental mandate.

Key components of the framework include targeted financing for initiatives in the areas of water and wastewater management, waste solutions, air quality improvements, urban development, sustainable energy projects, sustainable production, climate resilience and adaptation activities, access to basic services and reduced exposure to air quality hazards. Each funded project is selected for its potential to deliver substantial environmental benefits and/or to improve access to essential services for the population of the border region. Our robust project evaluation and selection process ensures compliance with environmental and social governance standards and our ongoing commitment to transparency and accountability.

S&P Global Ratings has provided an independent second-party opinion of the framework, affirming its alignment with our sustainability objectives and respected international principles and guidelines for green, social and sustainability bonds and loans.

Texas Projects and Impacts of those projects

Across all financing programs that NADBank provides, Texas secured more than $139.5 million in 2023 for the construction and implementation of 15 total projects. 

The metrics listed below are environmental benefits from the Texas projects receiving financing as well as expected outcomes when projects complete construction and move into operation: 

• New/Improved access to drinking water service 1,948 of new/existing connections.
• Wastewater discharges eliminated 0.9 million gallons daily.
• New/Improved access to wastewater services 2,776 of new/existing connections.
• Additional/Increased/Improved waste managed 40 tons/day.
• GHG emissions avoided 457,054 tons/year.
• NOx emissions avoided 334 tons/year.
• SO2 emissions avoided 334 tons/year.
• Clean energy produced 929.5 GWh/year.
• Energy Delivered 118.38 GWh/year.
• 2023 Texas projects benefitted more than 238,000 Texans.

What strategies does NADBank use to educate and raise awareness among employees, customers, and stakeholders about the importance of conservation and sustainability?
NADBank employs an all-of-the-above approach to educating and raising awareness for activities and priorities related to conservation and sustainability.  

Internal communication is vital to the success of the Bank’s operations. So much so that we ensure we dedicate ample time to communicate with Bank staff. A few tools that are utilized include a quarterly all-staff meeting, monthly newsletters, and all-staff emails from the Managing Director to notify the staff of recent developments. These opportunities have proven to help increase morale but even more, providing the vision for the employees to continue to be able to focus their efforts with the end goal in mind.  

With potential clients of the Bank, this is a constant beating of the drum. Whether it be the NADBank Summit or specific state-hosted events where the Bank can present, these events have helped raise the profile of the Bank and share our conservation and sustainability goals with both public and private sector sponsors who may be interested in financing a project. Additionally, the Bank has started to share webinars on different border topics of interest as well as launching a blog earlier this year.  All of these strategies have helped get our message out to potential clients.

Related to outreach of stakeholders, project events have been one manner in which the Bank has been able to share our commitment to sustainability. Recognizing that there are influencers out there that are also our stakeholders, we have made it a priority to invite Governors, Members of Congress and other dignitaries to join us at our project events. This strategy has proven effective as it has helped increase traditional media as well as social media visibility.  We also make it a point to update Members of Congress and Governors on a regular (sometimes quarterly basis). Other tools that we have used for stakeholders include updating our website, which should be ready to go next year as well as our annual report and other financial reports that we post on our website.

Can you share specific examples of successful partnerships or innovative collaborations NADBank has formed with other organizations to enhance sustainability and conservation outcomes?
To support ongoing, sustainable development in border communities, NADBank works to establish partnerships and build long-term relationships with federal, state and local agencies, non-governmental and international organizations, academic and financial institutions and the private sector, among others. These associations have increased project and program coordination, support joint strategy development and foster regular exchanges of information, creating synergies that have a positive impact on border communities. Below are some of the key agencies and institutions that have worked closely with NADBank in support of its mission:  

• U.S. Department of the Treasury 
• U.S. Department of State
• U.S. Environmental Protection Agency 
• International Boundary and Water Commission, U.S. and Mexican sections
• U.S. Department of Agriculture Rural Development 
• Inter-American Development Bank 

NADBank collaborated with the Trust for the Americas and STTE Foundation to train 100+ water operators in the El Paso/Juarez region. Skills for Sustainability is a binational workforce development initiative that empowers individuals to become the next generation of water operators to drive sustainable development. 

“NADBank is thrilled to be part of this initiative that aims to help meet the demand for skilled workers in the water industry by providing training and job placement for vulnerable, low-income populations on both sides of the U.S.-Mexico border,” mentioned John Beckham, NADBank Managing Director.

Linda Eddleman, CEO of The Trust for the Americas, emphasized the significance of addressing the critical challenges facing border communities. “Through initiatives like Skills for Sustainability and partnerships with organizations like NADBank, Microsoft, El Paso Water, and our local partners STTE and Western Tech, we are empowering individuals to be agents of change and drive meaningful progress in the region,” said Eddleman.

From left to right: U.S. Congresswoman Veronica Escobar provided a keynote address, NADBank Managing Director John Beckham and El Paso Water President & CEO John Balliew at a Skills for Sustainability graduation ceremony in March. 

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 reports are available here.   

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. 

NADBank’s recently adopted Strategic Plan 2024-28 addresses holistically the nexus of three dimensions of infrastructure development:

• Well-managed and sustainable water resources needed by all communities;
• Clean energy needed for the economy and, in particular for water management; and 
• A greener economy that provides good jobs, creates less waste and uses natural resources more efficiently.

During the next five years, NADBank will:

• Maintain water (including treatment of wastewater and transboundary flows) as its highest investment priority while promoting investment in the preferred -sectors of air quality (including electric mobility) and solid waste using innovative solutions beyond the regular product mix;
• Prudently evaluate projects in clean energy within the portfolio limits, with particular emphasis on storage and transmission, and;
• Develop a strong brand that consolidates the institution as a binational leader, creating value for Mexico, the U.S., and the border region and facilitating more robust partnerships with stakeholders to diversify grant resources and deliver innovative financing.

WATER is a PRIORITY

During the next five years, the water sector will remain the highest priority for the Bank. 

Considering the associated challenges and opportunities in the water sector, NADBank has established three related objectives: 

• Improve access to water and wastewater services for all border region residents.
• Strengthen water resource management to improve resilience to droughts and climate change, including diversifying water sources, such as desalination and reuse.
• Support more efficient water use in agriculture, including conservation and more efficient agricultural practices.
  

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?
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. 

Grants may be awarded in amounts of up to US $250,000. In the event the project represents a regional effort where more than one community is involved, the amount awarded may be up to US $350,000.  A little in this case goes a long way to help develop the project to construction readiness.

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?
Texas is the home of 55 Fortune 500 headquarters, 90+ Fortune 1000 headquarters, more than 1,740 foreign-owned companies and 3.1 million small businesses. Texas also shares the border with the four Northern Mexican states of Chihuahua, Coahuila, Nuevo Leon and Tamaulipas. This multistate region is home to several ports of entry, and various industries that rely on environmental infrastructure daily.  

Recognizing the importance of the Texas-Mexico border, the Agreement Between the Government of the United States of America and the Government of the United Mexican States Concerning the Establishment of a North American Development Bank states the principal office of the Bank shall be located in San Antonio, Texas, with a secondary office in Ciudad Juarez, Chihuahua.

Find out more about NADBank’s conservation and sustainability efforts here.

Glossary

STTE Foundation – Success Through Technology Education (STTE) Foundation, a nonprofit launched in 2018 in the Southwest Texas Borderplex Region, advances educational programs that foster entrepreneurship, a STEAM-ready workforce, and technology comprehension.

Green Finance – A loan or investment used to support environmentally-friendly activities.