The North American Development Bank (NADB) established the Border Environment Infrastructure Fund (BEIF) to administer grant resources provided by the United States Environmental Protection Agency (EPA) to help finance the construction of water and wastewater projects in the U.S.-Mexico border region. This webpage outlines the eligibility criteria, authorized uses, and procedures for accessing EPA funds administered through the BEIF.

Objective

The objective of the BEIF is to make environmental infrastructure projects affordable for communities throughout the U.S.-Mexico border region by combining grant funds with loans and other forms of financing. It is designed to reduce project debt to a manageable level in cases where users would otherwise face undue financial hardship and projects could not be implemented.

Eligibility

Only water and wastewater infrastructure projects located within 100 kilometers (62 miles) of the U.S.-Mexico border will be considered for funding. BEIF funds may be used to support projects that serve a single community or regional approaches that serve multiple communities and/or outlying areas. Eligibility is based on a set of project selection criteria and affordability guidelines.

1. Project Selection Criteria

• Projects must address an existing human health and/or ecological issue. Priority will be given to those projects likely to have the most impact.
• Projects must have a U.S.-side benefit. Priority will be given to projects with benefits on both sides of the border.
• Only projects certified by the Border Environment Cooperation Commission (BECC) will be selected.
• Priority will be given to projects with maximum funding from other sources and where program funding (BEIF) is necessary to complete financing of the project.
• Adequate planning, operations and maintenance, and pretreatment provisions are prerequisite to detailed design and construction financing.
• Community infrastructure only will be selected.
• For drinking water projects, drinking water quality projects only will be selected, not raw water supply. Therefore, only drinking water treatment plants and treated water distribution systems will be covered.
• Projects where the discharge is directly or indirectly to U.S. side waters, must target achievement of U.S. norms for ambient water quality in U.S. side waters, although infrastructure development may be phased over time. Any flow reductions that result from implementation of non-discharging alternatives must not threaten U.S. or shared ecosystems.
• Project funding intended for U.S. colonias will not be available unless the state, county or respective municipal government has established an enforceable local ordinance, or other zoning rule, which prevents the development or construction of any additional colonia areas or further development within an existing colonia without necessary infrastructure.

2. Assessment of Financial Need

BEIF grant assistance is determined based on an affordability assessment of the community’s project. The basic concept is that grant funds be applied toward projects so that the value of the grant funds has the greatest marginal benefit. In general, the marginal benefit is increased when the grant funds are used in tandem with other financial resources and when the assistance is targeted toward project costs that are above what could normally be financed by the project sponsor’s sources of credit. Furthermore, grant funding is very important when the costs to the ultimate users (ratepayers) from the use of credit mechanisms result in rate increases that are not sustainable.

In Mexico, the Comisión Nacional de Agua (CNA), in conjunction with state and local authorities, applies its formula for determining which projects are deemed affordable and have priority to be funded. In the U.S. affordability is a measure of a community’s ability to pay the cost of water and wastewater infrastructure. The fundamental determinant of affordability in the U.S. is the ratio of the project sponsor’s cost as a percentage of the local median household income. This benchmark is used to determine eligibility in the U.S. for grant funds under the BEIF.

The affordability analysis is performed solely to determine project eligibility. However, meeting this eligibility criterion neither guarantees a commitment by NADB or EPA to provide funding nor indicates a specific level of grant assistance. The grant amount is determined based on a comprehensive financial analysis of the project, utility and community that takes into consideration eligible projects costs and the availability of other funding. All BEIF funding proposals are prepared by NADB on a case-by-case basis and are subject to final approval by EPA.

Uses of Funds

Two financial mechanisms are available to make projects affordable; transition assistance, which makes loan repayments affordable to the ultimate users, or construction assistance, which buys down project costs. Thus, BEIF resources may be used to financially assist in making projects affordable as follows:

• Transition assistance is designed to ease a community’s adjustment to higher user fees over time. Grant funds are used to help pay system debt up to a seven year period, so that user fees may be gradually raised to the level required for the system to become self-sustaining with proper operations and maintenance. Transition assistance may be applied to debt service and certain reserves.
• Construction assistance may be applied towards the costs of final design and construction, including residential hook-ups and construction management.

In formulating grant proposals, transition assistance must be maximized for a project before construction assistance may be considered. Construction assistance will be considered when transition assistance is insufficient to bring user fees to an affordable level. In many cases, a mix of transition assistance and construction assistance may be the appropriate solution to a community’s needs.

Operation

Application Process and Determination of Project Eligibility

Determination of Grant Amount and Award Process

Procurement
Project sponsors are responsible for the procurement of all goods and services related to the project. However, procurement of goods and services with BEIF funds must be carried out in compliance with NADB Procurement Policies and Procedures.

Additional NADB Assistance Available

In addition to project financing, NADB can assist communities and project sponsors with the planning and design of projects to be certified by BECC. In particular, NADB can help finance design and related studies needed for the proper development of these projects through its Project Development Program (PDP). Assistance for studies aimed at enhancing the financial performance and managerial efficiency of the utility is also available through the NADB Institutional Development Cooperation Program (IDP).

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