Public Meeting of the Board of Directors November 17, 2016 San Antonio, Texas

Transcription

1 Border Environment Cooperation Commission and North American Development Bank Public Meeting of the Board of Directors San Antonio, Texas ENGLISH VERSION 1 MR. HEREFORD: Good afternoon. Good afternoon. Welcome and welcome to the public meeting of the Board of Directors for the North American Development Bank and the Border Environment Cooperation Commission. Before we get started into the meat of the agenda, I would like to call on Gerónimo Gutiérrez, the Managing Director of the Bank, to introduce one of our special guests. MR. GUTIÉRREZ: Good afternoon. Muy buenas tardes. Good afternoon, dear Board members, dear friends. It is a pleasure to have you all here, and I have the privilege of presenting to you someone that is very dear to the institution, to the North American Development Bank and to the Border Environment Cooperation Commission. Mayor Ivy Taylor is a friend of the NADBank for many reasons, not the least of which is that we occupy a city building, and the City has always been generous with us in hosting the NADBank for over 22 years now and has always been supportive of everything we do here at the NADBank and that is deeply appreciated. 1 Text shown in blue indicates that the original comments were made in Spanish and were translated into English

2 San Antonio, Texas s Mayor Taylor was selected Mayor of San Antonio on June 13, Prior to her election, she earned an appointment to the seat from her city council colleagues in July 2014, making her the first African-American woman to serve as mayor of a city with more than one million people and only the second female mayor of San Antonio. Before becoming a mayor, she served on the city council for five years. Mayor Taylor is focused on making San Antonio a globally competitive city where all residents are connected to opportunities for prosperity. To achieve this, some of the mayor s initiatives include developing a sustainable city budget, implementing the comprehensive master plan, creating a jobfriendly environment, growing the workforce, investing in human capital and establishing affordable and livable communities, and building and maintaining basic infrastructure. I also want to recognize the presence here of the Consul General of Mexico, Héctor Eduardo Velasco Monroy, who is also joining us. So, it is a great privilege Mayor to have you here. You ve always been a friend of the NADBank, and we re very happy to have you. Thank you very much. MAYOR TAYLOR: Thank you so much for that kind introduction. Good afternoon everyone. Thank you for inviting me to join you at your meeting today. I know we haven t gone through introductions of all the very important leaders in our room today but I do want to take a moment to thank you all for being here, but more importantly to thank you for the role you play on the Board of Directors and as partners. And I also want to recognize our new Consul General, Héctor Eduardo Velasco Monroy. Mr. Monroy has only been on the job a couple of months, but has already proved instrumental in helping San Antonio build a bridge with our neighbors to the south. And that said, I also want to welcome everyone who s traveled here. We have guests from as close as Eagle Pass to as far away as Tamaloopas? did I say that right? UNIDENTIFIED VOICE: Tamaulipas. Thank you. [chuckles] As well as from several other states in Mexico, including Chihuahua and Sonora. And to all of you I d like to say welcome to San Antonio or welcome to San Antonio. We re so proud to have the North American Development Bank located here in our great city, and we truly believe in its mission. As you know, several years ago the U.S. and Mexico Governments both entered into a partnership to create the NADBank, as well as the Border Environment Cooperation Commission. It was an effort to preserve and enhance the environmental conditions and quality of life for families living along the U.S.- Mexico border. And so, today I m proud to be here as the Board of Directors for both - 2 -

3 San Antonio, Texas s institutions announces three new approved projects. All three are environmental infrastructure projects in the waste and wastewater sector. And together these projects will impact more than 35,000 residents in three different parts of North America: Texas, Arizona and Sonora. I certainly applaud the Board for choosing to invest millions of dollars in grant money into projects that will give so many families a basic necessity clean water. My vision for San Antonio was mentioned during the introduction that we are a globally competitive city where every resident is connected to opportunities for prosperity but really, we should want that for everyone across the globe, and through these projects you re helping to make that vision a reality. I also want to thank and congratulate the Board for partnering with Mission Solar Energy, which is a local San Antonio company, to install a solar-powered facility for a pediatric cancer center in Tijuana. We all know and have heard stories about our youngest citizens fighting for our lives. And I m proud to know that businesses located here are going to help brighten and energize a building where children and families need to focus on healing. So, again, to all of you, I say thank you for your vision to help people across North America and for the work you re doing and for the difference that you re making. I hope you have a very productive meeting and a great day in San Antonio. I hope you get to go out and enjoy the Riverwalk a little bit this evening before the cold front blows in. Thank you all. MR. HEREFORD: Thank you Mayor. Well, with the welcome from the Mayor, now we ll move into the agenda. I d like to introduce the Board Members who really oversee all the projects that the Mayor mentioned and starting with Ms. Gretchen Biery, Director of the Office of Multilateral Development Banks from the U.S. Treasury. She serves as the Board Chair. I d like to recognize Dr. Gonzalo Canseco, Head of the International Affairs Unit of the Mexican Ministry of Finance and Public Credit and Board co-chair. I d like to recognize Mr. John Creamer, Deputy Assistant Secretary for Mexico and Western Hemisphere Regional Economic Policy and Summit Issues from the U.S. State Department; Mr. Mauricio Ibarra Ponce de León, Director General for North America from the Mexican Ministry of Foreign Relations; Mr. Randy Hill, Deputy Assistant Administrator of the Office of International and Tribal Affairs from the U.S. Environmental Protection Agency; - 3 -

4 San Antonio, Texas s Mr. Armando Yáñez Sandoval, Deputy Director General for Border Affairs of the Office of International Affairs Coordination at the Ministry of Environment and Natural Resources...Say that one three times fast. [LAUGHTER] I d also like to recognize the Honorable Texas State Senator, Jose Rodriguez, who serves as the U.S. border states representative; Mr. Homero Soto Vargas, who serves as the Mexican border state representative; Ms. Denise Ducheny, who serves as the U.S. border public representative; and Dr. Carlos de la Parra Rentería, the Mexico border public representative. Now, I d like to introduce the people that actually oversee the operations on a day-to-day basis. I d like to introduce María Elena Giner, General Manager of the Border Environment Cooperation Commission, as well as Gerónimo Gutiérrez, who you met earlier, our Managing Director here at the Bank. As we move through the program, we have a lot of VIPs. We really appreciate the diversity of the group. The Mayor mentioned Chihuahua, Tamaulipas, Sonora, Eagle Pass. El Paso sent a letter. So, we really appreciate you taking the time to travel here. As we do our work, it s always important as you, as the customer, get an opportunity to come and see the work that we do first hand. So, with that, I d like to recognize the Honorable Mayor of Ciudad Acuña, Coahuila, Mayor Lenin Pérez Rivera. I d like to recognize the Honorable Ramsey English Cantu, Mayor of Eagle Pass; the Honorable Jesús Juan de la Garza Díaz, mayor of Matamoros, Tamaulipas; the Consul General Consul, thanks for being here with us; Dr. Cecilia Caballero, Secretary of Urban Development for the State of Chihuahua; Mr. Carlos Talancón, Secretary of Economic Development for Tamaulipas; Mr. Luis Carlos Romo, Executive Commissioner of the Environment and Sustainable Development Comission for the State of Sonora; Mr. Luis Javier Pinto Covarrubias, - 4 -

5 San Antonio, Texas s General Manager of the Tamaulipas State Water Commission; Mr. Enrique Guillén Mondragón, National Chairman of CANACINTRA; 2 Al Zapanta, President, U.S.-Mexico Chamber of Commerce; Roberto Espinosa, President of the Asociación de Empresarios Mexicanos de San Antonio; Ana María Hierro Barba, Technical Secretary of the Ministry of Sustainable Development of the Government of Nuevo Leon; and Mauro Corrales, Manager of OOMAPAS in Nogales. 3 At this time, I d like to turn the microphone over for Gretchen Biery to say a few words as Chair of the Board for the North American Development Bank and the BECC. Thank you Gretchen. MS. BIERY: Thank you Jesse. I will keep my remarks brief, because I think we re all here to hear from you as well, but to just say, first of all, we re very grateful to be here in San Antonio and really appreciate the mayor s hospitality and that she took the time to come here and speak was really a highlight for us and emphasizes the value that many of us put on the North American Development Bank. We re very happy to be here, and I want to thank my fellow Board members and NADBank management and the staff that do an incredibly hard and good work and with their support we ve had a very successful Board meeting today. As the Mayor highlighted, we approved three projects. These are projects, like all NADBank projects, that really improve the lives and the environment for Americans and for Mexicans along the border. It s a very unique institution in this regard, working on both sides. So that was an important development for us today, approving the three projects. But we discussed a wide range of issues. We reviewed the financing of the institution and its operations, budgetary plans. So, it gives us a really good opportunity as Board members to think about the work that the institution does and how it s constantly striving to improve its impact. I would also note that the NADBank is going through a merger, which will increase efficiency in terms of combining the work of the BECC and the NADBank. And that s something that the Board s very supportive of and commend management for making that such a smooth process. And I would just say, you know, again that we are very pleased to be here. It s my first time in San Antonio, and I must say it is an incredibly beautiful city, so thank you very much for having us. 2 National Chamber of the Manufacturing Industry, Cámara Nacional de la Industria de Transformación (CANACINTRA). 3 Local water utility, Organismo Operador Municipal de Agua Potable, Alcantarillado y Saneamiento (OOMAPAS)

6 San Antonio, Texas s MR. HEREFORD: Well, you ve heard from the Mayor and you ve heard from Gretchen about the projects that we approved. So, instead of us continuing to talk to you about what we ve done, we re going to show you a brief video now of what we did here in So, if we can roll the video please? [VIDEO] NARRATOR: North American Development Bank and Border Environment Cooperation Commission. In 2016, the Board of Directors of the North American Development Bank (NADB) and the Border Environment Cooperation Commission (BECC) has certified 12 projects and approved US$113.5 million in loans and grants to support project implementation. Of the financing approved, US$101.2 million in loans and grants is being provided directly by NADB, while US$12.3 million in grants will come from the Border Environment Infrastructure Fund, which is funded by the U.S. Environmental Protection Agency (EPA) and administered by NADB. Additionally, as of September, more than US$148 million in loans have been contracted, including financing for an industrial emissions control system in Coahuila, a loan increase to complete construction of the desalinization plant in Ensenada, Baja California, and a border-wide water and energy efficiency project through a Property-Assessed Clean Energy or PACE program in the United States. MR. CARLOS CARRANZA [NADB Director of Project Development]: The Bank also provided a new loan worth about US$28 million to fund a border-wide program for the purchase of low-emission buses along the Mexican border. The pilot program has been very successful, and it s improving the public transportation in the Mexican border cities with cleaner vehicles. MR. MIGUEL ÁNGEL VELASCO [General Manager of Mercader Financial, S.A.]: One of them is Monterrey, which has access to natural gas, and the loan support of the North American Development Bank has been key Also in the state of Sonora, we have been able to participate substantially in two cities with the replacement of the fleet and also in part of Ciudad Juarez, the support of the North American Development Bank has been key. MR. ALEX HINOJOSA [NADB Deputy Managing Director]: As a result of its lending activity, NADB closed the third quarter of 2016 with an outstanding loan balance - 6 -

7 San Antonio, Texas s of US$1.345 billion, reflecting US$102 million in additional loans and an amortization of US$44 million for a net increase of over US$58 million for the first three quarters of NARRATOR: With regards to grant operations, NADB has signed seven financing agreements totaling US$21 million provided by EPA through the Border Environment Infrastructure Fund. Six of these grants are for water and wastewater projects in U.S. communities in Arizona, New Mexico and Texas. Overall, these projects will improve water quality and sewer services for more than 288,000 residents. On the Mexican side, one financing agreement was signed with the local utility in Reynosa, Tamaulipas, to improve the wastewater collection system and increase treatment coverage to 100% of the city. MS. RENATA MANNING-GBOGBO [BECC Director of Grant Programs]: The Bank also contracted a grant through its Community Assistance Program with the City of Tombstone, Arizona, for water system improvements that will help reduce arsenic concentrations to the maximum permitted level for this community of 1,380 residents. MR. DUSTY ESCAPULE [Mayor of Tombstone, Arizona]: I just want to thank NADBank and BECC for all the effort they ve put into this project for us. It s truly and sincerely appreciated by myself and the citizens of Tombstone. NARRATOR: In technical assistance, NADB and BECC have approved close to US$972,000 to support 16 studies or other development activities, including various seminars and forums, such as the E-Waste Recycling Program in Piedras Negras, Coahuila; the III Border Green Infrastructure Forum in Arteaga, Coahuila; and the new five-module, diploma-level course on the basics of water utility management for Mexican communities in Monterrey, Nuevo Leon. MR. ARTURO GARZA JIMÉNEZ [General Manager of the water utility in (SIMAS) in Piedras Negras, Coahuila]: NADBank is to be commended for its decision to offer these diplomas, in coordination with UMI and the Monterrey Technological Institute through the School of Government and Public Transformation. These courses are reinforcing the abilities and capacities of administrative, operational and senior utility staff. NARRATOR: Also, as part of the technical assistance activities initiated this year, NADB began a partnership with the Inter-American Development Bank (IDB) to implement its Emerging Sustainable Cities program in the Mexican border region. The Municipality of Hermosillo, Sonora, is the first border city to adopt this urban sustainability planning tool. The kick-off meeting was held in September to train local authorities on how to implement this methodology. Colegio de la Frontera - 7 -

8 San Antonio, Texas s Norte, a strategic partner of both IDB and NADB, is applying the methodology for this project, and once the plan is implemented in Hermosillo, NADB and BECC will work to replicate it in other communities throughout the border region. In addition, more than US$600,000 have been approved through the Project Development Assistance program or PDAP, funded by EPA and administered by BECC, for the development of water and wastewater projects. MS. REGINA GARCÍA JIMENEZ [NADB Technical Specialist]: So far this year, eight projects have been completed and are currently in operation, including the rehabilitation of the wastewater collection system in Piedras Negras, Coahuila, which prevented untreated wastewater discharges into the Rio Grande. NARRATOR: The two Ventika wind farms also began operations in Nuevo Leon. With the completion of these clean energy projects, four wind farms supported by the two institutions are now operating in Mexico with a total installed capacity of 461 MW. For NADB and BECC, it is important to know that the projects they certify and finance are not only completed as designed, but also perform as intended to improve the environment and related health conditions for border residents. This year, a total of 18 projects targeted for close out. Through this process the institutions compare anticipated objectives at the time of certification against actual outcomes and also evaluate the operational performance and sustainability of the project within 12 to 18 months following completion. In addition, NADB and BECC perform impact assessments on select projects to determine if the infrastructure is being used as anticipated and evaluate the impact in the lives of border residents. MS. MARÍA ELENA GINER [BECC General Manager]: Measuring our results has become the cornerstone of determining the impact we have on the communities we serve. In 2016, BECC and NADB continued to move forward with 21 closeout reports to measure the performance of our certified projects. We also completed our second impact assessment for the wastewater projects implemented between 2002 and 2014 in Tijuana, Mexicali, Tecate and Rosarito. The results demonstrated that over 90 percent of the population connected to the wastewater system and eliminated their latrines and failing septic tanks. Also, during the same period, state health data demonstrates that in three cities gastrointestinal diseases decreased between 16 and 33 percent. This is wonderful news because it demonstrates residents are receiving the benefits of utilizing the infrastructure built. Our next impact assessment will cover the water and wastewater infrastructure implemented in the communities of San Elizario and Socorro in El Paso County, Texas. MR. GERÓNIMO GUTIÉRREZ [NADB Managing Director]: Both the BECC and the NADBank continue to work on activities to merge their full operations, and we - 8 -

9 San Antonio, Texas s have also begun the search to fill the new position of the Chief Environmental Officer. The Chief Environmental Officer will be a central position in the new organization, who will be in charge of ensuring the continued oversight and success of the functions and programs currently managed by the BECC, upon full legal integration, which is expected to occur in mid Regarding the capital increase, both countries have subscribed already that capital increase. Mexico, in fact, has already deposited the first US$10 million as part of its contribution. In the case of the U.S., we re working diligently with Congress to include the authorization language and capital contribution as part of this 2017 budget. MR. HEREFORD: That s a major impact along the border, so I d like a round of applause for the Board members and all the staff who worked on this. That s a good transition. I d like to now announce the formal signing of a coordination agreement between the NADB, BECC, the National Chamber of Manufacturing Industry which is CANACINTRA and the Oportunidades para Emprendedores (Financiera Emprendedores). So we re going to do a quick signing ceremony at the table. So if I could call The main objectives of the agreement include working together to identify projects eligible to receive financing from the Bank from CANACINTRA s affiliates, designing a joint financing mechanism with Financiera Emprendedores to facilitate access to NADB-funded loans for CANACINTRA affiliates, and facilitating energy efficiency training for CANACINTRA affiliates and Financiera Emprendedores staff, among others. And so with that, I d like to call on Gerónimo and Maria Elena to please come to the table. Enrique Guillén Mondragón, national president of CANACINTRA, and Juan Carlos Sierra Boche, president of the bank Financiera Emprendedores. [SIGNING OF AGREEMENT] At this time, I d like to call Enrique Guillén Mondragón to come and say a few words about CANACINTRA and about the agreement. MR. GUILLEN MONDRAGÓN: Good afternoon everyone. I m pleased to be here with NADBank Managing Director Gerónimo Gutiérrez Fernández; the honorable presidium; Mr. Carlos Talancón, Secretary of Economic Development for the State of Tamaulipas; the Mexican Consul in San Antonio, Mr. Héctor Monroy; the president of Financiera - 9 -

10 San Antonio, Texas s Emprendedores, Juan Carlos Sierra Boche; Edmundo González, representing ProMexico in this city; my colleagues from the National Board of Directors; the heads of delegations in the border region and various other entities and CANACINTRA, friends one and all. It gives me great pleasure to meet with our friends from NADBank, the regional development institution created within the framework of the North American Free Trade Agreement, and with our friends and associates from Financiera Emprendedores. NADBank, or the North American Development Bank as we also call it in Spanish, has the important task of acting as a partner and bilateral catalyst in communities located along the U.S.-Mexico border, for the purpose of improving financial viability, financing and, of course, long-term regional development with criteria for protecting our shared environment. Financiera Emprendedores, for its part, CANACINTRA's financial arm, seeks to promote entrepreneurial initiatives through comprehensive service of the highest quality, which includes business financing and consulting. As for what the Chamber of the Manufacturing Industry, CANACINTRA, an organization that I am deeply honored to preside over, does, it is the most representative business institution of Mexico and Latin America. With the vitality of this broad representation, joining forces with the North American Development Bank, through the signing of the agreement that brings us together today, is of the greatest importance. It will allow us to promote the development and financing of projects of mutual interest in the border region through the following strategic actions: Identify projects eligible for financing from NADBank among CANACINTRA affiliates located within 300 kilometers south of the international border between Mexico and the United States in the six Mexican states; work on designing a joint financing mechanism between NADBank and Financiera Emprendedores that will facilitate access to NADBfunded loans for CANACINTRA affiliates located in the border region, in accordance with the current policies and standards of both institutions; establish a mechanism that will allow CANACINTRA to keep its associates apprised of projects in which NADBank and our sister institution, the Border Environment Cooperation Commission, are involved, as well as bidding processes and programs in which they could eventually participate; facilitate energy efficiency training for CANACINTRA affiliates and Financiera Emprendedores staff, as well as jointly promote the benefit of large-scale renewable energy projects in the border region. We have solid ties forged through history and through the intense economic activity shared by the peoples of both nations. They make it clear that the bonds of friendship that unite us are permanent and will be able to withstand the harshest tests to which they may be put. Gentlemen, thank you very much. It s an honor to be signing with you. I think that this collaboration that has always existed between Mexico and the United States will help us advance our nations. I am confident that it is going to be mutually beneficial, and congratulations everyone. Thank you very much

11 San Antonio, Texas s MR. HEREFORD: I d like to call on María Elena Giner, General Manager of the BECC, to also say a few words about the signing. MS. GINER: Thank you very much. I would like to make a few comments with regards to this agreement that we re signing with the Chamber of Industry in Mexico. For the last five years, we have been working with, we ve been working well actually for the last 20 years we ve been working primarily with public institutions in delivering our services of infrastructure. This is a great opportunity for us to begin to work with the private sector on projects that will assist the private sector in becoming much more competitive. The other thing, in my view, that this agreement is also going to help us do is precisely in line with what we re doing with the States along the border under climate action planning process. Mexico has made a commitment before the international community of reducing their greenhouse gases by 50% by If we put the six Mexican border states together, by 2020 they re going to be generating 33% of those greenhouse gas emissions with only 19% of the population. What this tells us is that the border states need to play a very important role in the reduction of greenhouse gas emissions, and the advantage of having this agreement with CANACINTRA is that, as we ve been working with the States on their public policies related to efficiency, the number one policy, public policy, that has come out across all of the states is the need to update and make more energy efficient industry in these border states. This is a wonderful opportunity of not only working from the top down, but also from the bottom up in identifying these opportunities. And so, I really want to congratulate CANACINTRA. And it s kind of ironic, and I do want to tell this story because we re, the Border Environment Cooperation Commission is located in Ciudad Juarez, and every day for the last year I have been driving around the corner and seeing the local tortilla manufacturing company, right next to our offices, with solar panels. And I think to myself, how is it that these people got it done? And how can we help proliferate this along the entire U.S.- Mexico border? I sent somebody to go visit with them, and it turns out they were able to figure out how to do it. How to figure out how to, you know, figure out the FIDE program and were able to bring down those funds. 4 And this is an opportunity to be able to leverage that experience on a bigger, on a bigger scale and actually really contribute to the reduction of greenhouse gases and energy efficiency. And what happens with that is that there s cost-savings and it s going to make Mexican businesses much more competitive on the international scale. So, it s really, for me, a very, very important step in combining these two efforts. So congratulations to CANACINTRA and congratulations to all of the participants that made this happen. Thank you. MR. HEREFORD: I d like to announce another signing ceremony for a technical assistance capacity-building initiative for the construction of a solar facility to support the development of an energy efficiency project at a pediatric cancer center in Tijuana, Baja California. So, to the table I would like to call Juan Manuel Roberto Castro Torres. He s the 4 Mexican energy efficiency fund, Fideicomiso para el Ahorro de Energía Eléctrica (FIDE)

12 San Antonio, Texas s founding president of Fundación Castro-Limón. Alex Kim is the president and CEO of Mission Solar Energy, and then Gerónimo Gutiérrez, Managing Director of NADB and María Elena Giner, BECC. [SIGNING OF AGREEMENT] MR. CASTRO TORRES: There is a saying in the United States that says: It s better to be lucky than to be rich. I had the honor of meeting Gerónimo Gutiérrez at a luncheon in Tijuana held by the business community for the ex-secretary of finance and chatting during the meal we talked about the foundation that I ve had the honor of heading for the last 13 years and that cares for low-income children with cancer, ages 0 to 18 years. We have cared for children, two and three weeks old. I want to thank NADBank and its director, as well as the Board of Directors, for this generous donation. Forgive me, my wife, Margarita de Castro is here with me, and I'm going to ask her to join me here, please. And well, this Foundation was born 13 years ago, as I said. We had the great misfortune to lose a child to cancer. Later, there was another Tijuana family who joined us for the same reason, and that is how we began the Castro-Limón Foundation and the Baja California Pediatric Oncology Center. To date, we are pleased to report that we have declared 51 children cancer-free, and we have cared for hundreds of children in the 13 years we have been in existence. Unfortunately, the facilities we had were inadequate. Every day there is more of this illness that attacks all sectors and all social classes and all ages. We needed to grow. We are growing more than 250%, so we believe that we will be able to meet the needs that will arise over the next years. Well, these solar panels will be a big help for this expansion we are doing. Because, first, they are going to save us a lot in electricity consumption and, moreover, we are going to have much cleaner energy. This hospital that we are building, we want, and it is going to

13 San Antonio, Texas s be, environmentally sustainable. And once again thank you, NADBank and your Board for allowing us to be here is this beautiful city. We just got here yesterday, but from the little we have seen, it s a great city. Thank you all very much. MR. HEREFORD: This is actually the third project that we ve done in this sector for children s hospitals. And so, we have a brief video to show you the work that the NADBank has done with the BECC in this area. [VIDEO] NARRATOR: Through the Technical Assistance Program, the North American Development Bank and the Border Environment Cooperation Commission support capacity-building activities aimed at achieving effective and efficient operation of public services. In this area, both have supported the implementation of solar pilot projects for non-profit organizations to meet part of their electricity needs from a clean energy source that results in significant cost savings. Since 2012, two solar plants have been built for two children hospitals, allowing the hospitals to utilize more resources to care for more children each year. MR. JORGE SILVA [NADB Senior Program Manager]: These projects are possible with the collaboration of NADBank and BECC, state entities and private companies that have donated their technology and expertise to make these projects a reality and have proven to be successful. ON-SCREEN TEXT: Hospital Infantil de Especialidades de Chihuahua. Hospital handles 50,000 appointments a year, benefitting 11,000 children. Solar installation completed in Donation of 1,122 solar panels: SunTech Context GT250 inverter provided by: Schneider Electric Design, engineering and implementation services: SunEdison Grant funding: NADB US$300,000, BECC US$50,000 During the first year of operation the 250-kW solar installation generated 488,200 kw of electricity, saving the hospital MX$ 1 million. Hospital Infantil de las Californias in Tijuana, B.C. handles more than 27,000 appointments a year for children on both sides of the U.S.-Mexico border. Solar installation completed in July 2014 Donation of 528 solar panels: Astroenergy Racking provided by: VERSOL Solar

14 San Antonio, Texas s Inverter provided by: KAKO New Energy, Inc. Design, engineering and implementation services: Sociedad de Ingenieros Eléctricos y Electrónicos, S.A. Grant funding: NADB US$170,000, BECC US$70,000, Comisión Estatal de Energía de B.C. US$25,000. The 150-kW solar plant meets about 50% of the medical center energy needs a year, which represents savings of MX$400,000 NARRATOR: Today, NADB is proud to announce support for a third solar installation in Tijuana, Baja California. ON-SCREEN TEXT: Centro Oncológico Pediátrico, Fundación Castro-Limón, Tijuana, B.C. Provides support to low-income families that have children diagnosed with cancer Grant funding: NADB US$125,000, BECC US$50,000 Donation of solar panels: Mission Solar Project consulting services: Enertis MR. ANDRÉS ARAUJO SANZ [General Manager of Fundación Castro Limón and the Centro Oncológico Pediátrico de Baja California]: Well, the pediatric cancer center, we are in a growth phase. We are currently providing care for 76 young patients. We should be caring for much less. We average 20,000 appointments a year and climbing. In other words, well, our installed capacity is growing and in this addition of the Board and of the institution itself we would like the, we want, excuse me, the pediatric cancer center to have world class facilities. In these facilities, what we want is to be sustainable, to spend very little, to reuse resources and that is how we found the North American Bank, the NADBank, to request support in this, well, phase that we are in, no, of growth. Electricity is a monthly expense and sometimes we have funds earmarked for investment, but no funds allocated for current expenses. And having an investment expense eliminate current expenses helps us tremendously to direct funds to the treatment of children with cancer. We thank the sponsors for this support and for making our mission, our objective, also somewhat green, sustainable

15 San Antonio, Texas s MR. HEREFORD: And I would just like to take a moment to recognize Alex Kim and Mission Solar Energy. Without their donation of the solar panels, this project would not have taken place. So, if we can have a round of applause for Mission Solar Energy. MR. HEREFORD: Madam Chair, if it is okay with you, we ll now proceed to the public comment portion of the meeting. The first public speaker that we have registered to speak is the Mayor of Acuña, Lenin Pérez, from the state of Coahuila. Mayor. MR. PÉREZ: Good afternoon everyone. We are very pleased to be at a meeting of this nature. We did not want to pass up this opportunity to come to greet you and express to you, on behalf of the Municipality of Acuña, particularly to Gerónimo Gutiérrez, Director of NADBank, and Ms. María Elena Giner, who have been working with us for approximately a year now on a very important project for our municipality. You all know, maybe you all heard, that we lived through a very tragic event in Acuña in 2014, a tornado that hit our city, that destroyed around 1,300 homes. Acuña has a problem with flooding, and we have been working on a canal project, a storm drain that will help us solve one of the city s serious problems and will help provide a solution for around 4,000 homes in that area. And, well, we greatly appreciate it. Acuña already has a long history with NADBank. I am the mayor for the second time. It was up to me back in 2008, 2009, to obtain grants for the construction of the drains and sewer lines in our city, around US$12 million with a US$5 million loan, which was accessed through the municipal water system. And we have always had the steadfast support of these institutions, and we want to express, I wanted to take a few minutes of your time, to express our recognition, on behalf of the people of Acuña, for your complete solidarity with us. Thank you very much. MR. HEREFORD: The next public speaker that we have signed up is Mayor Jesús de la Garza from Matamoros, Tamaulipas. Mayor. MR. DE LA GARZA: Hello, good afternoon. It gives me great pleasure to be standing before you today, to greet you, and with immense gratitude from Matamoros for these two great institutions, for NADBank and for BECC. Greetings to the Board, Gonzalo, welcome, although this is not my city, I m happy to see you here

16 San Antonio, Texas s I m just going to make a few brief remarks, also regarding the long history of success of these two great institutions with our community, with Matamoros, Tamaulipas. The origins of NADBank and BECC go back to , when the Free Trade Agreement also began. Indeed, it emerged as a binational institution that seeks to broaden our cooperation. The spirit in which it was created has led to a better understanding of our region and the multiple points of contact that link people on both sides of the border. What s more, it is very clear to me that the borders, in their respective spheres of sovereignty, are separate from our environmental borders, because we share the same natural region, resources, and we form part of the same ecological region. Evidence of the indisputable contribution that NADBank and BECC have made to improving our integration lies in the long list of successful projects developed in Matamoros and in the region, projects that were covering different categories with the historic development and consolidation of these institutions and that range from water and wastewater, solid waste management, the collection and disposal of tires, to other infrastructure and energy efficiency projects. Now that everything indicates we should be seeking even more and greater integration between our countries, and not just trade, but on a variety of issues ranging from the environment, security or issues such as immigration, it s the moment in which the discussion has been opened by the upcoming changes to the Government of the United States. We believe it is strategic that we discuss the reasons for preserving the binational dialogue between allies, between societies and governments concerned about strengthening their relations, multiplying them and diversifying them. NADBank and BECC and the projects that they have successfully developed demonstrates this, which, in our case, exceeds an investment of more than $2 billion pesos. They show that our nations must clearly continue on the path of understanding and cooperation. In 1994, from 1994 to date, the result of NAFTA demonstrates that we have been successful, and that production processes in Mexico and in the United States complement each other and are integrated to compete economically with other regions such as Asia and Europe. But we have also been successful in a cooperation that compensates for inequalities in the capacity of each region. This integration that, thanks to NADBank and BECC, we have been able to bring to the areas of sustainability, wastewater treatment, environmental responsibility in the same region and in seeking greater symmetry in the quality of life on both sides of our border, has been equally successful largely thanks to you. The reasons for maintaining our integration are the same reasons that give meaning to the existence of NADBank and BECC. We continue to share a vision and have many projects to build together. Our vision is binational. Our common agenda... can, going forward, promote in our region, for Matamoros, technical assistance for the final designs of the third phase of PIAS, the Comprehensive Water and Wastewater Project that you well know, and achieve its certification; support to restore solid waste management systems, where new contingencies have emerged for Matamoros, both in sanitation and illegal dumping, collection and final disposal; cleanup of the tire collection centers, support for emerging paving programs I m telling you this now that I am mayor. Before, I was the manager of the water utility. Now I have a wider range of needs, where we need more of

17 San Antonio, Texas s your support support for emerging paving programs; the efficient use of energy by the water utility; and a special project involving the recovery and cleanup of the estuaries to link them to a large sustainable urban mobilization project between Brownsville and Matamoros. The San Juan de los Esteros Hermosos project. 5 The main idea of this project is to promote the recovery of these estuaries and the surrounding urban areas in order to link them to the recovery of public spaces that improve sustainable mobility and family and social integration for the residents of Heroic Matamoros. It involves promoting the use of sustainable green infrastructure, expanding training, catchment excuse me of the water in the estuaries, expansion of the non-motorized mobility network, creation of recreational areas for sport and family activities. It is a large urban regeneration project in 15 specific, well-defined polygons with bike paths. An estimated investment of 155 million pesos. The citizens of Matamoros have been witnesses to the importance of these two institutions for the impetus they have provided and will continue to provide since their creation, to stronger, more balanced, and more sustainable development along the more than 3,000 kilometers of the U.S.-Mexico border. Without a doubt, among BECC and NADBank's best institutional attributes, it must be recognized that they have turned into arenas for excellence in binational cooperation. They are institutions that have also generated great capacity for dialogue and discussion in our region. And this is something that, today, more than anything, has great relevance. Thank you very much for your attention and the hospitality you have shown us since our arrival in San Antonio. We look forward to having your ongoing support to continue prospering, advancing and strengthening our region on both sides of the border. Thank you very much for your attention. Good afternoon. MR. HEREFORD: Next, I d like to call up Rod Colwell, Chief Executive Officer, Controlled Thermal Resources, El Centro, California. And I believe Rod has a presentation. MR. COLWELL: Governmental representatives from both Mexico and USA, thank you so much for the opportunity to speak. The Board of NADBank, Management, ladies and gentlemen, thank you so much. My name is Rod Colwell. Firstly, I ll get my accent out of the way. I m Australian, so uh... And we proudly call home El Centro these days. We re currently developing a geothermal power station at Salton Sea, and today I wanted to share with, all parties, our view on commercialization of a pending environmental disaster with the Salton Sea. It s a real issue. Air quality is an issue. The sea of water mitigation, losing water to San Diego next 5 The Matamoros region was once known as San Juan de los Esteros Hermosos, which literally means San Juan of the beautiful estuaries

18 San Antonio, Texas s year is an issue, and the sea is accelerating. So, we re five years into development plans. We ve been fortunate to talk, in talks with the NADBank. And we re very, very privileged to be here. So further ado, I ll start and I ll first introduce you to Jason Czapla, our principal engineer, PhD, to any technical questions. Please bear with us. A short video. [VIDEO] ON-SCREEN TEXT: Controlled Thermal Resources (CTR) Salton Sea Restoration & Renewable Energy Initiative Mud pots are formed and reformed at the Salton Sea by subsurface pressure and are the outward signs of constant geothermal activity. The Salton Sea Trough is home to the Salton Sea Known Geothermal Resource Area, which is regarded as the largest untapped geothermal reserve in the country, if not the world. CTR has secured a site with high geothermal resources and plans to develop a power plant with a nameplate capacity of 250 MW. Mullet Island, future site, Hell s Kitchen Geothermal Power Plant New geothermal geyser activity in the Salton Sea located 200 yards northwest of Mullet Island. Controlled Thermal Resources is developing a geothermal renewable energy project located at the Salton Sea. A smaller but sustainable Salton Sea depends on the co-equal goals of environmental mitigation, renewable energy optimization and habitat & species preservation. MR. COLWELL: Okay, so what you re seeing there, pretty much, is reality of the exposed playa river. Everything you ve seen was covered in water only three years ago in the Salton Sea, and it s accelerating. So, I won t hold too much up on this agenda today. It s just the Salton Sea and restoration, our views, geothermal energy and our proposed power plant. The sea looking to the south, towards Mexican border. This is a NASA image, which you can see there just by the time-lapse photography between 1994 and 2005, that shallow lens of water. CTR s sites, which we ve leased from the IID. 6 We ve close to 4200 acres of leased lands, which are about 50% exposed by water at the current stage. Mullet Island back in It looks like a tropical Australian oasis there. Mullet Island in 2011 when we first come to site of what used to walk over there, the bird habitat, which was actually quite isolated. This is Mullet Island now. Exposed playa. No expense spared, with a model in the photo there. 6 Imperial Irrigation District (IID)

19 San Antonio, Texas s So, that s the macro; this is more the micro. These are our development plans. The way we see it. So, we have three primary sections for our first stage of development of 280 megawatts of base load or 2.1 million megawatt-hours per annum. What we this demonstrates a grid system. This is where we see commercialization of this impending environmental disaster. Our injection or production wells are very well located in a grid. Our production wells in one grid and one centralized power station located at Mullet Island. Future development thereafter. The sea will be gone. So, that represents a sort of dry playa that s about to happen. We basically expose or extend existing infrastructure in grid systems something that s been done for 110 years, certainly in Imperial Valley. What that enables then is further bird habitat, farmland, a patch of basically solar, and just keep replicating that out. This image just demonstrates how the surface area is less affected with geothermal 280 megawatts our surface area is only 135 acres. So it accelerates that as that expands out. Future development, our first stage at 280 megawatts. Second stage, 560. Then the further development of the Salton Sea and its commercialization of covering that playa with commercial uses. So that s our view on the field the resource itself. Everything underneath the field is retrospect. So, CTR has done a lot of work, a lot of reports on this geothermal field. It s the most prolific in the U.S., if not the world. A wide hold on I know there s a tight schedule. So, basically the resource is quite defined. Drilled well results over the years: 734 F, very shallow, very permeable. The highest production wells in the world are located within this field. CTR s location within the field is pretty much center line, as this slide demonstrates. The field itself is being re-determined by Mr. Dennis Kaspereit at the last Geothermal Resource Council Meeting in Sacramento at just under 3 gigawatts of known energy. This is not, in any way, a greenfield field, by the way. This is absolutely an extension of an existing field. You have CalEnergy Operating company forming a magnum, Magnum Power, Hudson Ranch. It s just a prolific resource. Some wells as high as 52 megawatts gross. So, it s the most prolific in the U.S., if not the world. The power station, itself I ll finish up very soon, so please bear with me. Firstly, the name Hell s Kitchen is something that we had not thought up of. And we ve had some push back on that. But there s actually a restaurant there located at Mullet Island back in 1908 a dance hall, apparently a great place to go, and uh and was a great place for locals. So hence the name in honor of Captain Davis Hell s Kitchen. Quick corporate mantra we re all about competing with fossil fuel. We actually are cheaper than new coal-fired built power plants. We do that without government incentives. We re completely on a net-net basis. We ve always recognized that this doesn t work, particularly change of governments, administrations, so we ve kept ourselves very arm s length of that. Partnerships are absolutely everything. We have a collective 240 years of experience from the Salton Sea field, within our team. A very experienced kind of people. It s a very unique

20 San Antonio, Texas s resource in the world of geothermal. And scale and scalability is something that unlock the difference between price. A 50-megawatt plant is an unviable proposition. It s not costeffective. Economies of scale are everything. Our total resource is 750 megawatts, so we ll keep scaling up in 140-megawatt trains over time and keep doing that without replicating expensive infrastructure, etc., etc. A quick project overview. So, stage one, 280 megawatts made up of 140-megawatt trains, power trains. Crystal reactor clarifier. That basically means that we can extract or a third party can extract minerals, valuable minerals, from the brine downstream. We ve actually just entered into an arrangement with a minerals extraction company, as we are sitting on the largest lithium resource in the U.S. Work s under way. We have full approvals. We re five years into a development plan. Approvals for delineation or exploration drilling commence first quarter next year. This is the location of the well pads. Excuse me, I m trying to rush through this. Economies of scale are wonderful. A great, wonderful time to drill. We re, our first prices were $5.2 million dollars per well. Currently we re at two and a half million dollars a well. Timing is superb, when it comes to development. I just wanted to share some of that information. A full field development would look a lot like this, except for the rolling green hills. Our development plan basically encompasses, as shown earlier, a centralized power plant. Stage II we ve already thought about how we master plan moving forward up to 560 megawatts and ultimately up to 750. This also allows for that covering of playa and the environment on the surface areas. Our power plant. Design. A lot of work s been done. We ve completed all our engineering. We ve completed all our process flow diagrams. Economies of scale on turbines. The last 50-megawatt turbine set that was delivered at Salton Sea cost US$25 million. Our two 140-megawatt sets of Fuji triple flash units of So, I am not the economist, but that s sort of the economy of scales and scalability that we re talking about and the cost savings. Job creation. Construction, we can have the 400 at peak as far as construction jobs over our development period. Eighty-five permanent jobs of various skill sets there that certainly and certainly just on that subject, metallurgy is a real issue for Salton Sea. So, the best local knowledge is local. It s not as if we re pulling in labor from anywhere else. It has to be organically grown, as our business is organically grown over the last five years. So, the programs that we re talking to, to Director Galindo, various people we know at the IID, Imperial Valley, IVDC. We re sort of pressing ahead with that. Transmission. We have our queue positions. We re locked in. We have the IID now as a wheeling authority. We can wheel in all directions as far as exit power. Our off-taker market basically is made up of the Department of Energy. So we met with the department [unintelligible] last week. That s still real and alive. The IID ll be paying for 300 megawatts. The IID and an off-take agreement with the minerals extraction company. So, we have about 1100 megawatts of demand that yet to be in negotiations. Some of the purchase, power purchase discussions, we believe the data center markets are another opportunity, a wonderful opportunity for the Salton Sea. It's base load power

21 San Antonio, Texas s It s ready available land. There's high speed data on the Union Pacific line. So it's, it's all sorts of discussions going on with this off-take. This off-take agreement will stay alive, a requirement for up to 250 megawatts from Salton Sea geothermal to help with the environment as well. Upsides, we have an allowance. We own technology. We had a vast mineral deposit. We're entitled to tax credit, although we don't allow for them, and we have a scalable development. I m just finishing. Minerals. The minerals company that, you're talking serious revenues here with mineral companies of up to sort of US$1.6 million on that. And thank you very much. MR. HEREFORD: Continuing the public comments, we have Luis Carlos Romo Salazar, Environment and Sustainable Development Commissioner from Hermosillo, Sonora. MR. ROMO SALAZAR: Good afternoon everyone. I m compelled to participate today for two reasons. First of all, I come as a personal representative of the Governor of the State of Sonora, Claudia Pavlovich, and I salute the entire Board, and particularly María Elena and Gerónimo. She sends her greetings and hopes to see you soon. We have some appointments at the end of the month and the beginning of December as well. We hope that you will be able to join us at the plenary meeting of the Sonora-Arizona Commission, where we are going to present some environmental projects. And the second reason I m compelled to participate is also to thank the two institutions, BECC and NADBank, for all the support we have received this year. November of last year was the first time I had the opportunity to be here participating in the public meeting. And this year, well, we have done many things. The truth is that, in a nutshell, we have been working closely with the two institutions in in several ways. But there are two that I want to highlight, that we are just about to complete these two issues. One is strategic planning that, thanks to the support of the BECC and NADBank, has become a reality. This strategic planning is between the state of Sonora and Arizona in the areas of water, environment and biodiversity, where we are making short-, medium-, and long-terms plans in order to share concerns and projects that we can work on jointly. So, that is an achievement that we have been able to achieve this year, and that is why I want to recognize both institutions. And the second issue, is another that, is an issue that María Elena likes very much, that of green infrastructure, where at the end of the month we will also have the opportunity to hold a workshop in the city of Hermosillo, where two municipalities, though primarily the municipality of Hermosillo, is going to report on the work that it has been doing in this issue to succeed in establishing regulations that can be applied within the development of public works in the municipalities of Sonora. BECC hired the Municipality of Hermosillo to work on this manual. It is nearly finished and at the end of the month we re going to hold a workshop where we re going to meet with the other 72 municipalities of the state of Sonora for the purpose of relaying the knowledge that has been developed in this area by the

22 San Antonio, Texas s Municipality of Hermosillo, and there are four other municipalities Tijuana, Ciudad Juárez, Nogales round out these four municipalities that are working very hard on this topic. But, we are going to carry out this workshop with BECC support as well. So, as I was saying, we have been working very hard, and at the end of a year, well, we are seeing the results. There are other projects that also right now well, Geronimo will probably talk about them a bit that we are discussing and that we also hope to bring to fruition next year. So, as we say in Spanish, 'noblesse oblige, and the nobility of two institutions for collaboration with the State of Sonora is the reason we are here and, once more, I reaffirm to the Board of Directors, on behalf of María Elena and Gerónimo, that we are looking forward to continuing to work with you in the future. Thank you very much. MR. HEREFORD: The next public comment will be given by Dr. Cecilia Olague Caballero, Secretary of Urban Development and Environment for the State of Chihuahua. DR. OLAGUE CABALLERO: Good afternoon as well. I am here on behalf of the Governor of the State of Chihuahua, Javier Corral Jurado. And, well, it is a great honor and pleasure to be here witnessing the important projects that have resulted from this cooperation that has been going on for many years across the border. I know that, in the case of the State of Chihuahua, there is also a tradition of very worthwhile projects. We have received as an input a very important Climate Change Action Plan that is going to let us generate a public policy instrument that is going to help us regulate many of the actions that the Governor is thinking about undertaking during the five remaining years of our administration. It is very important for us to promote clean electricity projects in the border towns. Also, the projects that have been developed in paving and that help reduce pollution, in particular PM 10, which is one of the main causes of air pollution in our cities. It is also important for us to promote plans for non-motorized mobility, continue strengthening, of course, mobility plans for public transportation. They are also very important. Promoting the regeneration and enhancement of public spaces, we also believe is a very worthwhile instrument. Of course, it is important to work in the area of sanitary landfills so that the landfills may be certified and as a result of efficient management, these solid waste, municipal solid waste management systems, may even eventually be able to generate electricity. It s also very important. It s all outlined in the actions to combat climate change, right, that must be dealt with in our cities. They are, I believe, very worthwhile projects. Right now, well, with what we are initiating, support would be very important with respect to technical assistance in generating the projects that later will bring the infrastructure works to fruition and that will

23 San Antonio, Texas s contribute to achieving a better environment, right, a better quality of life and well-being for our cities. I think that it is also important to work, I wouldn t want to fail to mention it, on... Specifically, we have a contaminated site, in the case of the city of Chihuahua. It s within the border area. We have a project for remediation of the site, and it would also be important to work in this sense, with regards to cooperation. Well, I think that soon, right, at the next meetings held here, we could be talking about the results we have achieved as a result of the technical assistance support from these two important associations. Thank you very much. MR. HEREFORD: Next I would like to call Richard Marsh, City Manager, City of Bisbee, Arizona. MR. MARSH: Thank you, sir. I only need three to five minutes of your time. I came here for three reasons. One is to introduce myself as the new City Manager of Bisbee, Arizona. I've been there for four months now. The second, which is most important, to say thank you. Thank you for your support that you provided the City of Bisbee over the years for sanitary sewer and also the sewer laterals. I want to thank you for that. Also it's been a joy for me to sit here and see how you've been funding projects, not just watching out for the bottom line, but from compassion, and I want to thank you for that as well. The third thing is I wanted to make you aware of some things are happening in our region. When I started, I felt that one of the highest priorities for me should be improving the relationships between the United States and Mexico and play my little role in doing that as a City Manager in Bisbee, Arizona. I've met with the Governor's office. I've also met with Congresswoman Martha McSally. I've also met with the Consulate in Douglas. I also met with the distinguished gentleman here, the President of the Chamber of Commerce, and I also had the opportunity to meet with the gentleman right here who spoke so eloquently and I'm so excited about working with Sonora. In fact, we're talking about having a trade show in Bisbee, Arizona next May as a result of these discussions and relationships that have been built. You may know that Bisbee has been designated as the Best Small Town in the United States of America by USA Today, and also the Best Historic Small Town by Sunset magazine. What that's done for our community is brought in many, many, many more people from around the world, around the globe to Bisbee, from Europe, China, Japan, and also from Mexico. And what that's created is an opportunity for infrastructure improvements that we're going to need along the Naco Highway which is between Bisbee and the port of entry in Naco. Perhaps site assessment and also modern sewer would be needed. We've had people, in fact, come to me saying they're looking at putting in things such as resorts. They're looking at family entertainment centers, clean family entertainment center, in that area, as well as manufacturing and logistics

24 San Antonio, Texas s I just wanted to make you aware of that. At some point, at the appropriate time, I may be talking to someone here, there that is, on your Board regarding that matter, and thank you again for the opportunity to speak. MR. HEREFORD: The next speaker I would like to call on, Ana Fernanda Hierro Barba, Director of the Ministry of Sustainable Development for the Government of the State of Nuevo León. MS. HIERRO BARBA: Thank you. Good afternoon. Okay, well, I would like to mention very quickly that I m here on behalf of the Governor of the State of Nuevo Leon. We appreciate the invitation to be here today, and we want to reaffirm our commitment to BECC, to NADBank, to increase the cooperation that now exists. We know that the state of Nuevo Leon has a relatively small border in comparison with the other states; however, for us, both the regional connection and the border situation, it s an important time. We have issues that are really challenging for both the state and the region. We are talking about the fact that we have one of the most polluted cities in terms of air in Latin America; that we have challenges in terms of water, of waste, of infrastructure. And for us, it is very important to grow in these areas and cooperate in both infrastructure development and in technical capacities. We greatly appreciate the cooperation we received this year with the green infrastructure workshop we held in the city. We hope to be able to do something much more ambitious next year. We have been talking with María Elena Giner about it, and we are very excited about that possibility. We have, in fact, two people that are going to the workshop and are going to provide training on the subject. And we intend to have a very close link with the mayors in the state in order to develop this. Moreover, we are hoping to be able to cooperate on technical matters related to water and waste in the future. And, well, we have an entire sustainable mobility issue that we want to promote. So, it is going to be very important for us to be able to broaden these discussions and delve more deeply in these matters. Thank you very much. MR. HEREFORD: I'd like to call on the next public speaker, which is Arturo Garza Jiménez, Manager, SIMAS, Piedras Negras, Coahuila. 7 7 Local water utility, Sistema Municipal de Aguas y Saneamiento (SIMAS)

25 San Antonio, Texas s MR. GARZA JIMÉNEZ: Good afternoon everyone. Gerónimo, María Elena, it s a pleasure to greet you, greet the entire Board of Directors, and all those present here. I come from a utility in the border region, the city of Piedras Negras, border with Eagle Pass, Texas. The reason for my participation is just to tell you that we are fortunate to have the support of BECC, of NADBank, for the development of some projects. When our Administration received the utility, it was immersed, you could say, in mediocrity, an inefficient utility and a utility with many financial problems, that was barely operational. Fortunately, with a technical assistance program and funding from the Border 2020 Program, an energy audit was performed in the municipality of Piedras Negras, in the utility, and we followed up on it. We at the utility did not have the capacity to do this; therefore, with municipal support we were able to initiate a first phase. And I m gratified to report that we have completed the first year. And in the first year, we exceeded anticipated savings by 22%. Savings were estimated at $9.5 million pesos, and $11.6 million was saved. This may seem a small amount of money for some utilities, but for our utility, it is everything. Because it has already enabled us, with the implementation of some other policies, to be more self-sustainable, to have healthy finances, and to deal better with the challenges facing or anticipated by a utility. Now, we can begin the second phase with these funds and by mixing them with funding from the federal government. And, in addition, we are completely re-engineering the utility, also thanks to the support of BECC and NADBank, with an Efficiency and Investment Management Improvement Plan for SIMAS-Piedras Negras, which tells us that we are going to need 100 to 120 million pesos every year. This is more of a commitment than we envisioned at the start. But, nonetheless, we are now committed, both the Municipality and the utility, to achieving it. However, unfortunately it s not all good news. Last week, the House of Representatives in our country approved severe budget cuts of more than 72% in the grants provided for water and wastewater. Unfortunately, I don't know what is going to happen in the rest of the municipalities in the country. But fortunately, in the border states, we have the support of BECC and NADBank. And, as a colleague just said who spoke earlier: 'Gratitude is a virtue.' And, in the name of the Municipality, I want to thank Gerónimo, María Elena, for the confidence you have placed in the Municipality and in the utility with the support of technical assistance and also infrastructure programs such as CAP to make progress and continue being sustainable. 8 We are better prepared now to face the financial challenges of the future, and we look forward to your continued support. Also, to my colleagues from states that have just changed administrations, remember nothing more than I am speaking from the perspective of water water is colorless. It has no color, it has no borders, and it is everyone s responsibility to take care of it and preserve it for the benefit of future generations. Thank you. 8 NADB Community Assistance Program (CAP)

26 San Antonio, Texas s MR. HEREFORD: Before we move on to our next public speaker, I would like to recognize from the office of Senator John Cornyn, Jonathan Huhn, who just walked in, and then from the office of Congressman Will Hurd, Daniel Mesa. Thank you for joining us. The next public speaker is Dr. Juan Mauro Corrales, General Manager of OOMAPAS, Nogales, Sonora. 9 MR. CORRALES: Good afternoon. First of all, a big thank you to all the Board members. In truth, I believe that for us in the city of Nogales, the work we have done with BECC and the North American Bank has been quite, very, very important. Gerónimo and María Elena, thank you for supporting our city. In truth, I have had the chance to work very closely from 1997 until 2003, when I was a member of the Sonora State Water Board. I got to see the birth of most of the projects that, today, are being dedicated in each of the cities. In 2006, I became Director of the utility in the city of Nogales, and it was my responsibility to begin the process for the infrastructure works that our city enjoys today. We have worked hard in the city of Nogales with the support of you all. We have also worked a great deal with EPA, and I believe that that has been a great benefit for both Nogales, Sonora and Nogales, Arizona, since... beginning with the 'quick fixes' that were done in 2000, the sub-collectors; then later, the treatment plant; then the solar energy plant, the only one in the country, in Mexico, making the wastewater treatment plant 100% sustainable with its clean energy, with the photovoltaic plant that just began operation a few months ago, and we still have a reserve for the expansion that we are building now. We began expansion of the second part of the plant at the beginning of the year, and we have the energy that is produced. It is going to be sufficient to continue working with it. But, something very important that I do want to stress to the Board members and to María Elena and Gerónimo is the project that we are have practically, already in the certification process, the project for the six subdivisions. You know it very well, Gerónimo, María Elena, the southwest area of our city. We have already held the second public meeting, which was very successful a little more than a month ago. We, as a city, have already begun working in the six subdivisions. We are investing, right now, an average of six million two hundred thousand Mexican pesos from the City to demonstrate how we want to work with you. We almost always wait for the money from the Bank to begin projects. This time, we are doing the opposite. Our current mayor, architect Cuauhtémoc Galindo, well, as you can see, he is a professional architect. He is someone who knows a lot about infrastructure, especially urban infrastructure, the importance of water, sewers and, obviously, wastewater treatment so that it may be a sustainable city, and, obviously, that our city may grow in an orderly manner, and thus the city of Nogales, Sonora, and the city 9 Local water utility, Organismo Operador Municipal de Agua Potable, Alcantarillado y Saneamiento (OOMAPAS)

27 San Antonio, Texas s of Nogales, Arizona, well, we, the citizens living in them, will enjoy a better quality of life. Thank you very much, and I appreciate your attention. MR. HEREFORD: The next public speaker is Adalberto Laprada León, General Manager, OOMAPAS, Agua Prieta. MR. LAPRADA LEÓN: Good afternoon everyone, board members, the mayors joining us, guests, Gerónimo Gutiérrez, María Elena Giner, good afternoon to you all. The municipality of Agua Prieta borders the city of Douglas, Arizona. In 2010, we saw fit to take advantage of funding provided for some paving works. This time, as they say, water is colorless. We want to ask for your support because we are having a serious pollution problem since we do not have a wastewater treatment plant. We are requesting your help, both technical and financial, to secure the construction of a wastewater treatment plant. This is because the current treatment plant does not meet some quality parameters with respect to basic contaminants indicated in current official Mexican standards, regulated by CONAGUA. Moreover, its location has been overtaken by urban development so that homes are located less than a 500-meter from its radius and operation. It also generates harmful flora and fauna and bad odors affecting the environment and the receiving waterbody. With respect to the request, we are hoping for a favorable response within the scope of your capabilities, so that the sister cities we represent, Agua Prieta, in this case, and Douglas, are favored by the environment that surrounds us. This way, we can prevent health risks to humans and environmental risks, in this case, to nature. We are going to submit a document. We brought the documentation. And in truth, we earnestly appeal to the good will of this Board so that they will see fit to support us in this project that is affecting both border cities. Congratulations, I want to congratulate you, and may God bless you. Thank you. MR. HEREFORD: The final public speaker that signed up is Mariana Chew Sánchez. Is Mariana here? Okay. They also sent a letter. So we have a few letters

28 San Antonio, Texas s We received a letter from Citlalli Engineering in Mexico City regarding energy efficiency in water utilities. I won't read the entire letter here. All the letters will be included in the record of the meeting, but basically they're offering their technology in artificial wetlands and in biodigestion, biogas to power wastewater treatment plants. In addition to that letter, we received a letter from Veronica Escobar, the El Paso County Judge. I'll just read the first paragraph of that. The letter was addressed to María Elena and to Gerónimo. On behalf of the County of El Paso, I would like to thank the Border Environmental Cooperation Commission and North American Development Bank for approving our application and awarding El Paso County funding in the amount of $500,000 under the Community Assistance Program. That letter will also be included in the minutes. The Arizona Department of Environmental Quality sent a letter addressed to the Board. The first paragraph reads, Dear Board Members: The Arizona Department of Environmental Quality began an initiative to develop an Arizona-Sonora Environmental Strategic Plan with its counterpart agencies, the State of Sonora Ecology and Sustainable Development Commission in June This came about as an action item of the Arizona-Mexico Commission's Environment and Water Committee. As co-chair of this Committee and Director of the Arizona Department of Environmental Quality, I would like to acknowledge and thank the North American Development Bank and the Border Environment Cooperation Commission for the support they have provided in this endeavor. That letter will also be included in the record. And then we received a letter from the City of Imperial Beach, California, from the mayor. It's addressed to Chairman Jacob Lew, North American Development Bank. It reads: Dear Chairman Lew: It is with great urgency that I write this letter to request immediate assistance to fast-track investment in cleaning up the sewage discharges at San Antonio de los Buenos Treatment Plant (Punta Banderas), and stopping the discharge of treated and untreated sewage into the Tijuana River. The coastal shoreline of Imperial Beach, California, continues to be devastated by persistent water quality impacts from transboundary flows in the Tijuana River and sewage discharges on the beach at Punta Banderas. These sewage flows along Imperial Beach also impact the Navy training operations at Ream Field and the Naval Special Warfare Coastal Campus. There are simply an unacceptable number of beach closure events impacting the economy and public health along the south San Diego County beaches. For example, in 2015 there were 233 days of beach closures at Border Field State Park, 74 days of beach closures at Imperial Beach pier, and 41 days of beach closures in Coronado. The purpose of this letter is to emphasize the binational need to commit funds and resources to address the known causes of poor water quality that continue to impact the border region. And the Mayor of Imperial Beach, California's letter will also be included in the minutes of the meeting. Any other public comments from those in the audience? If not, I would like to call up Gerónimo Gutiérrez to say a few words before we turn it over to Gretchen. MR. GUTIÉRREZ: Thank you, Jesse. Just with the permission of the Board of Directors, I just want to thank and recognize on behalf of my colleague here, María Elena Giner and myself, all the staff, each and every one, every single staff from the Border Environment

29 San Antonio, Texas s Cooperation Commission and from the NADBank for their work this year. The results that you have seen are really thanks to the effort and each and every one of you. Some of them are at the back, some are still working, some are not here, some are at the border, some are traveling, and many of them are in Ciudad Juarez. But it wouldn't be fair, and I could not conclude without just thanking them here in the presence of the Board because it's really their work that make whatever we do possible. Again, every single staff member of both organizations. And particularly, I would like to thank and recognize the presence here of my colleague, Alex Hinojosa. He's, as you know, the Deputy Managing Director, which means here he's the COO. He's the Chief of Operations. He's the one that gets things done here at the Bank. And as you know, we are truly binational institutions in many ways, but one of them is precisely the fact that we sit side by side Mexicans, Americans, working indistinctly for the border communities on both sides, and in that regard I will ask just Alex to stand up and be recognized because much of what you've seen is thanks to him. And thanks very much to everyone present here from the Bank, to Selena who did everything and to the administration team, who always helps with all the meeting preparations, so that we may all be, in addition to productive, comfortable. So thank you Selena and thanks to Selena s team for all your support, to all of you for being here and to each and every one who is here from the Bank and from the Commission. Thank you. MR. HEREFORD: And if there are any members of the media that would like to ask questions as soon as we adjourn the meeting, you can certainly speak to people individually on a one-on-one basis. And with that, I'll turn it over to our Chair, Gretchen Biery, for her closing remarks. MS. BIERY: Thank you very much. Just very briefly, just to say thank you very much everyone for coming. I think it's particularly important to hear from community representatives, elected officials and their staff. I think this is precisely what public meetings should be about, and I think we would encourage more of that to hear about, you know, your own experiences and needs. It's useful for the Board to reflect upon that versus just seeing documents without a face to them. It is a wide representation. We've heard from officials from Mexico and the U.S., and that's much appreciated. So thank you again for taking time out of your very busy schedule to come here and spend a couple of hours with us. Thanks

30 San Antonio, Texas s MR. HEREFORD: With that, we adjourn the meeting. Please feel free to stay. We're going to have a reception out on the balcony. Hope you all can join us for a refreshing one. Thank you. [MEETING ADJOURNED]

31 San Antonio, Texas s ATTACHMENTS WRITTEN COMMENTS RECEIVED

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33 Maria Elena Giner, P.E. Border Environment Cooperation Commission General Manager P.O Box El Paso, Texas Gerónimo Gutiérrez Fernández North American Development Bank Managing Director 203 South St. Mary s Suite 300 San Antonio, Texas VERONICA ESCOBAR El Paso County Judge November 16, 2016 Dear Ms. Maria Elena Giner & Mr. Geronimo Gutierrez: On behalf of the County of El Paso, I would like to thank the Border Environmental Cooperation Commission (BECC) and the North American Development Bank (NADBank) for approving our application and awarding El Paso County funding in the amount of $500, under the Community Assistance Program (CAP). Your award will assist in funding the Vista del Este Water System Replacement Project, which will address an aging and potentially unsafe water system for 340 homes in this colonia. The needs of our colonias are vast and although El Paso County is working diligently toward addressing these issues, much work remains to be done. It is strong partnerships, like those we have formed with BECC and the NADBank, that are helping us address some of our communities most pressing needs. El Paso County would like to extend appreciation to both agencies and its staff for their continued support. The County of El Paso s mission is to provide a safe and healthy quality of life that enables people to thrive and reach their potential. On behalf of the residents of El Paso County, I would like to once again extend our appreciation for your continued support of our mission. If you have any further questions or concerns please do not hesitate to contact me or my staff at (915) Sincerely, Veronica Escobar County Judge 500 E. San Antonio, Suite 301, El Paso, TX Phone: Fax: countyjudge@epcounty.com

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37 [ LOGO] Citlalli Engineering Coyoacán 1025 C-8, Col Del Valle México, D.F., MÉXICO TRANSLATION El Paso, Texas; November 16, 2016 BOARD OF DIRECTORS NORTH AMERICAN DEVELOPMENT BANK RE: Energy Efficiency for Mexican Water Utilities Honorable members of the Board of Directors, I d like to hereby congratulate you on your commendable work at the helm of the Bank. Conscious of the high energy expenses currently incurred in Mexico to treat wastewater at times as much as 80% of all inputs as well as the high cost of operation and consumption of chemicals, we are submitting two projects that can be implemented separately or together in water utilities, specifically in wastewater treatment plants. These proposals are: Biodigestion plants for treating wastewater and generating biogas, biofertilizers and electricity. Artificial wetlands for treating wastewater. These two projects meet the goals of the National Development Plan, as mentioned in the objectives: Inclusive Mexico, Mexico with Quality Education and Prosperous Mexico, as well as globally in all environmental protection initiatives, programs and projects. These proposals will not only contribute to improvements in environmental and technical matters, but also will help address sociopolitical and economic issues in the area where they are developed. We are a women-owned company that has the support of companies worldwide with a broad portfolio of these types of projects. We have vast experience, certifications and accreditations in environmental engineering, agronomy and construction on an international level, as well as business administration, public administration and resource management. We are registered as service providers and consultants with various government agencies at the federal, state and local level in Mexico and the United States. Thank you in advance for your attention to this letter and we are at your service. Sincerely [Signature] Dra. Mariana Chew

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39 November 16, 2016 Chairman Jacob J. Lew North American Development Bank 203 South St. Mary s, Suite 300 San Antonio, TX Via FAX: (210) Dear Chairman Lew: It is with great urgency that I write this letter to request immediate assistance to fast-track investment in cleaning up the sewage discharges at San Antonio de los Buenos Treatment Plant (Punta Banderas) and stopping the discharge of treated and untreated sewage into the Tijuana River. The coastal shoreline of Imperial Beach continues to be devastated by persistent water quality impacts from transboundary flows in the Tijuana River and sewage discharges on the beach at Punta Banderas. These sewage flows along Imperial Beach also impacts the Navy training operations at Ream Field and the Naval Special Warfare Coastal Campus. There are simply an unacceptable number of beach closure events impacting the economy and public health along the south San Diego County beaches. For example, in 2015 there were 233 days of beach closures at Border Field State Park, 74 days of beach closures at Imperial Beach pier, and 41 days of beach closures in Coronado. The purpose of this letter is to emphasize the binational need to commit funds and resources to address the known causes of poor water quality that continues to impact the border region. The quality of effluent discharges from Punta Banderas wastewater plant urgently needs to be improved. In 1997, Border Environment Cooperation Commission (BECC) certified and approved a $7million upgrade to improve this facility. It has now been almost 20 years since this plant has undergone any major improvements. It is unclear if the plant uses oxidation ponds or activated sludge since reports to the BECC by the Comisión Estatal de Servicios Públicos de Tijuana (CESPT) differ. However, the plant is recognized by CESPT and US EPA to be over capacity and no longer able to provide effective wastewater treatment before discharging effluent directly on the beach at Punta Bandera. The discharge of partially treated wastewater on the beach at Punta Bandera is now recognized as a major cause of contaminated water for Imperial Beach as identified by a recent 2015 Scripps Institute of Oceanography project on the movement of nearshore and offshore currents in this border region. The City of Imperial Beach, County Department of Environmental Health, US EPA, and San Diego Regional Water Quality Control Board were presented the initial results from this study that identified pollutant transport times of 6-14 hours for sewage plumes to reach the Imperial Beach Pier during the summer.

40 Equally important is the need to eliminate transboundary flows in the Tijuana River, which persist even during summer months because of the addition of treated wastewater discharges from Arturo Herrera and La Morita treatment plants. During normal dry weather conditions, CILA operates the Tijuana River Diverter to capture and divert Tijuana River flows to Punta Bandera before reaching the international border. But the addition of treated wastewater in the Tijuana River is now impacting the successful operation of the CILA Tijuana River Diverter and resulting in greater frequency and volume of transboundary flows. It is necessary to either increase the operation capacity of the CILA Tijuana River Diverter or beneficially reuse the treated water from Arturo Herrera and La Morita. As the Mayor of Imperial Beach, I have taken an active role in improving and protecting the border region. The BECC-NADB can help support and prioritize key projects in the US-Mexico border region that are necessary to protect human health and enhance our local economies. We have accomplished many projects working together and I am confident that we will continue to cooperate in the efforts to prioritize necessary improvements for our border region. It is my hope that if the NADB can fast-track a desalination plant in Rosarito Beach to increase water supply in northern Baja California, it must provide equal attention to the horrendous issue of cross-border ocean and Tijuana River pollution that impacts Imperial Beach. Sincerely, Serge Dedina Imperial Beach Mayor cc: Chris Helmer, City of Imperial Beach Geronimo Gutierrez, North American Development Bank (ggutierrez@nadb.org) Maria Elena Giner, Comisión de Cooperación Ecológica Fronteriza (mginer@cocef.org) US Senator Dianne Feinstein (mary_dover@feinstein.senate.gov) US Congressman Juan Vargas (janine.bryant@mail.house.gov, paola.guzman@mail.house.gov) US Congressman Scott Peters (brian.elliott@mail.house.gov) US Ambassador Roberta Jacobson (protocol_usembmex@state.gov) Cónsul Marcela Celorio, (mcelorio@sre.gob.mx) Commissioner Edward Drusina (ed.drusina@ibwc.gov) Dave Gibson, Regional Water Board (dgibson@waterboards.ca.gov)

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