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"I am not anti-American. But I am strongly pro-Canadian." John G Diefenbaker, Prime Minister of Canada, 1958 |
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The North American Development Bank (NADB) and its sister institution, the Border Environment Cooperation Commission (BECC), were created under the auspices of the North American Free Trade Agreement (NAFTA). The NADB operates under the November 1993 Agreement Between the Government of the United States of America and the Government of the United Mexican States Concerning the Establishment of a Border Environment Cooperation Commission and a North American Development Bank (the "Charter"). Established in San Antonio, Texas, the NADB is a bilaterally-funded, international organization, in which Mexico and the United States participate as equal partners.
MISSION
The North American Development Bank (NADB) is an international financial institution established and capitalized in equal parts by the United States and Mexico for the purpose of financing environmental infrastructure projects. All NADB-financed environmental projects must be certified by the Border Environment Cooperation Commission (BECC), be related to potable water supply, wastewater treatment or municipal solid waste management and be located within the border region.
The NADB's mission is to serve as a binational partner and catalyst in communities along the U.S.-Mexico border in order to enhance the affordability, financing, long-term development and effective operation of infrastructure that promotes a clean, healthy environment for the citizens of the region. As pioneer institutions in their field, the NADB and BECC are working to develop integrated, sustainable and fiscally responsible projects with broad community support in a framework of close cooperation and coordination between Mexico and the United States.
The U.S.-Mexico border region, in which the bank focuses its efforts, is defined in the Charter as the area within 100 kilometers (approximately 62 miles) north and south of the boundary between the United States and Mexico. Spanning 2,100 miles from the Gulf of Mexico to the Pacific Ocean, the border region includes territory in the four U.S. states of Texas, New Mexico, Arizona and California and in the six Mexican states of Tamaulipas, Nuevo Leon, Coahuila, Chihuahua, Sonora and Baja California.
CAPITALIZATION
The authorized capital of NADB under the Charter totals $3 billion with equal commitments from the United States and Mexico. Each country has authorized the subscription of 150,000 shares of the bank's capital stock with a par value of $10,000 per share. Payments of capital by the two countries were initiated in 1994, with scheduled installments to be completed by September 30, 2006.
NADB CAPITAL STRUCTURE
Country ---------------- Paid-In Capital ------------ Callable Capital
United States ------ $ 225,000,000 ------------- $1,275,000,000 - $1,500,000,000
Mexico ------------------- 225,000,000 --------------- 1,275,000,000 - 1,500,000,000
Paid-In Capital and Callable Capital
Fifteen percent of the NADB's authorized capital ($450 million) is in the form of paid-in capital. Eighty-five percent of the NADB's authorized capital ($2.55 billion) is in the form of callable capital. To date, the NADB has received from the two countries a combined total of $348.750 million in paid-in capital and $1.976 billion in callable capital, representing 77.5% of its total subscribed capital.
Paid-in capital consists of actual cash funds contributed to the NADB by the two governments. Paid-in capital, once contributed, is actually held by the NADB and invested in short- to medium-term, high quality, fixed-income securities. It acts as the bank's cash reserves, which, in addition to providing loan loss reserves, can be used for a limited amount of direct lending. The paid-in capital must be maintained at adequate levels to protect the bank's creditors and ensure its operational integrity.
Callable capital does not represent actual cash funds contributed to the NADB by the two governments. It is composed of funds that are pledged to be provided to the NADB from the two countries only if required to meet the bank's obligations on borrowings of funds for inclusion in its capital resources as specified in the Charter. In other words, callable capital is essentially a guaranty for any bonds issued by the bank to raise funds in the capital markets for its lending program. Because no actual cash funds are received, callable capital may not be used to make loans directly.
In practice the callable capital acts only as a credit enhancement mechanism for the NADB. As such it allows the bank to borrow funds for inclusion in its capital resources with strong backing from the two countries, thus effectively lowering the NADB's cost of borrowing to that of a taxable U.S. high investment-grade security.
Capital Utilization
Under the Charter, ninety percent of the NADB's authorized capital may be used to finance environmental infrastructure projects in the border region. Ten percent of the capital subscribed by each country has been allocated to finance community adjustment and investment throughout the United States and Mexico in support of the purposes of NAFTA.
ORGANIZATION
The Charter provides that the bank shall have a board, a manager, and such other officers and staff as may be considered necessary.
Board of Directors
The NADB has a binational Board of Directors consisting of six members: three from the United States and three from Mexico. The chairmanship of the board alternates between U.S. and Mexican representatives every year. The current chairman of the board is the United States Secretary of the Treasury.
United States
Secretary of the Treasury
Secretary of State
Administrator of the Environmental Protection Agency
Mexico
Secretary of Finance and Public Credit
Secretary of Commerce and Industrial Development
Secretary of Social Development
All powers of the bank are vested in the Board of Directors, which determines bank policy within the framework of the Charter and bylaws, and approves all loan and credit proposals. All decisions of the Board require the assent of at least two representatives of each country. The Board holds an annual meeting and such other meetings as are necessary to the operations of the bank.
Management:
Bank management consists of a managing director and a deputy managing director. Under the Charter the Managing Director is elected by the Board of Directors and must be a U.S. or Mexican citizen. The Deputy Managing Director must be a citizen of the country not represented by the Managing Director.
As the chief executive officer and legal representative of the NADB, the Managing Director reports to the board and is responsible for carrying out its directives, as well as for the organization and day-to-day operations of the bank. The Deputy Managing Director serves as the bank's chief operating officer and supports the Managing Director in fulfilling his/her duties. Under the direction of the board, they oversee development of the bank's current and long-range objectives, policies and procedures.
Raul Rodriguez, a Mexican citizen, was appointed Managing Director of NADB on October 15, 2000.
Jorge Garcés, an United States citizen, was appointed Deputy Managing Director of NADB on April 2, 2001.
Staff:
Bank staff must be roughly balanced between U.S. and Mexican citizens. Under current bank organization, there are 40 staff positions. It is the intention of the bank to maintain a small number of staff and to rely on consultants and partnerships with other agencies in carrying out its operations. A general diagram of the organizational structure of the bank is shown below.
KEY BANK CONTACTS
Management:
Managing Director, Raul Rodriguez
Deputy Managing Director, Jorge C. Garcés
Finance
Chief Financial Officer, Lloyd Tyler
Accounting Officer, Fay Ramdass
Disbursement Analyst, Antonio Trivizo
Administration
Director of Administration, Susan Mowrey
Assistant Director of Administration, Angeles Aguilar
Information Systems Officer, Eduardo Macias
Communications
Public Relations and Government Affairs Officer, Juan Antonio Flores
Program Development
Director of Program Development, Suzanne Gallagher
Senior Programs Officer, Scott Storment
Senior Program Development Specialist, Tim Trevino
Project Development
Director of Project Development, Armando Perez-Gea
Senior Project Development Officer, Ramon Corral
Senior Credit Analysis Specialist, Francisco Casas
Technical Services
Senior Technical Officer, Fernando Roman
Senior Procurement Officer, Erick Schlebach
Find out more about the North American Development Bank by clicking HERE
Return to the Foreign Aid/Affairs/Defense budget by clicking HERE
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