The Board of Directors of the North American Development Bank (NADB) has announced the support of the governments of the United States and Mexico for a general capital increase of US$3 billion for NADB.
This amount, to be apportioned by both governments over an estimated period of five years, includes US$450 million in paid-in capital and the rest in callable capital.
United States President Barack Obama and Mexican President Enrique Peña Nieto agreed to support the capital increase at a January 6 White House meeting. The capital increase agreement must still gain congressional approval in both the U.S. and Mexico.
NADB Managing Director Gerónimo Gutiérrez stated:
"We welcome this decision on the part of the two governments. This capital increase will position the bank to continue fulfilling its mission of improving environmental infrastructure and the quality of life on both sides of the border in a way that fosters public participation and transparency."
NADB, created in 1994 as part of negotiations of the North American Free Trade Agreement (NAFTA), works to develop and finance environmental infrastructure in the U.S.-Mexico border region, including water, transportation, solid waste and clean and renewable energy. Established with an initial capitalization of US$3 billion, the two presidents have agreed to support a doubling of the bank's capital to US$6 billion.
In recent years, NADB has seen significant growth in its loan portfolio as it has worked to improve basic environmental infrastructure in communities along the border. To date, US$2.4 billion in loans and grants has been provided for the implementation of 203 projects throughout the border region, benefiting an estimated 15 million residents. The proposed capital increase will bolster the bank's capital adequacy so that it may continue to provide loans for needed projects.