Earlier this month, President Obama introduced his 2016 budget proposal and, to no one’s surprise, Congressional Republicans dismissed most of it as “dead on arrival.” This year’s budget brawl will likely be over the President’s more controversial proposals: free community college, higher taxes on big corporations, and a massive increase in infrastructure spending. However it’s often the smaller programs that don’t get much media coverage that are most at risk of losing funding. Among them is the EPA’s US-Mexico Border Water Infrastructure Program, an entity created to manage the funds the United States contributes to the little-known North American Development Bank. (NADB)
First established in 1994 as part of NAFTA, the NADB was a joint initiative between the United States and Mexico to fund clean water development projects on both sides of the border. In accordance with its operating charter, 90% of NADB funds are doled out in loans to state and local governments for clean water and wastewater sanitation infrastructure projects while the remaining 10% are given out directly as grants. This January, President Obama and Mexican President Enrique Peña Nieto announced together that their countries would be contributing a combined $3 billion in additional funds to the NADB, effectively doubling its current capital. This contribution includes $450 million of “paid-in capital” that the bank will be able to use immediately to make loans to eligible state and local governments.
While no one in Congress has yet to single out the NADB’s funding for the chopping block, the legislative branch has a history of axing programs individual members believe to be “waste, fraud, and abuse.” It is important that the public understand that the numerous successes of the NABD are proof that not a penny of taxpayer dollars has been put to waste. Since its inception, nearly $2.4 billion in loans has gone to 203 different projects that have benefited an estimated 15 million people on both sides of the border. Projects such as a wastewater treatment plant in Tornillo, Texas, fully funded with a $3 million grant from the NADB, are scheduled to begin this year to the benefit of 3,500 residents. Likewise, a new sanitation system being built in Baja California, Mexico will bring sewer access to 14,000 people for the first time. Additionally, thanks in part to NADB loans, towns and cities in northern Mexico have increased the percentage of sewage that is treated, from 21% in 1995 to 87% in 2012, a major accomplishment that couldn’t have happened without help from the NADB.
With its new influx of funding, the NADB hopes to expand its mission beyond funding clean water projects. In accordance with the EPA’s US-Mexico Border 2020 initiative, the NADB is moving to fund projects related to clean air, sustainable infrastructure, and renewable energy. In June 2014, work began on the second phase of the Sunpeak Solar Park, a project in Imperial, California that would bring carbon-free power to 20,000 people. Funded with a $41 million loan from NADB, the solar park is already a third of the way towards completion. This new expansion of the NADB not only benefits other areas of the region’s environment, but it could also be good for clean water projects as more visibility for the bank would encourage more localities to become interested in applying for loans.
In addition to funding a broader range of projects, there are a number of other ways more funding for the NADB could be beneficial. It can provide technical assistance to communities that may lack to resources to structure large-scale projects and help municipalities better pool resources. Along with its sister organization, the Border Environment Cooperation Commission, NADB can act as a central coordinator on cross-border projects so that interested parties have fewer hoops to jump through when applying for loans. A more streamlined funding and approval process means the benefits of these projects will reach more people more quickly.
Presidents Obama’ commitment of more NADB funds last month was a huge step forward in addressing key infrastructure problems along the US-Mexican Border. Now it is up to Congress to determine whether that money can be appropriated and spent. If clean water and adequate sanitation are to be a priority for citizens on both sides of the border, then following through on the President’s commitment must remain on Congress’ agenda.
Conor McGrath is a junior double majoring in International Affairs and Political Science. He spent his last semester studying abroad at Sciences Po in Paris, and is now spending his free time interning at a political consulting firm in DC. This piece is adapted from an editorial written for the Elliott School writing in the disciplines course – Science, Technology, and Policy.