public meeting of the board of directors november 14, … meeting of the board of directors november...

Border Environment Cooperation Commission and North American Development Bank -----------------------------------------

Comisión de Cooperación Ecológica Fronteriza y Banco de Desarrollo de América del Norte

Public Meeting of the Board of Directors November 14, 2013 San Antonio, Texas

VERBATIM VERSION / VERSIÓN LITERAL

MR. FLORES: Good afternoon, everyone. Get settled in. I just want to bring to your attention that we may hear some comments from Board members in Spanish today, and so we do have translation apparatus available for you if you want to hear simultaneous translation. Para ustedes hispanohablantes, monolingües, que prefieren o si quieren hacer uso de los aparatos de traducción, los tenemos disponibles aquí a la entrada, como la mayoría de la reunión se va a conducir en inglés. [ PAUSE / PAUSA ] Good afternoon, everyone. Welcome to this semiannual meeting of the Board of Directors of the North American Development Bank and the Border Environment Cooperation Commission. I would like to begin by recognizing and introducing the members of the Board of Directors at the dais, beginning with,…in representation of the current chairmanship of the Board of Directors, which is Mexico's Secretary of the Finance and Public Credit, Dr. Luis Madrazo Lajous, who is Assistant Secretary for Development Banks at Mexico's Secretariat of Finance and Public Credit; Ms. Karen Mathiasen, Director of the Office of Multilateral Development Banks from the U.S. Department of Treasury and co-chair of the Board of Directors; Ms. Ana Luisa Fajer, Directora General para América del Norte de la Secretaría de Relaciones Exteriores de México; Mr. Hugo Rodriguez, Acting Director of the Office of Mexican Affairs from the U.S. Department of State; el Mtro. Armando Yañez Sandoval, Director General Adjunto para Asuntos Fronterizos de la Secretaría de Medio Ambiente y Recursos Naturales, Mexico's SEMARNAT; and Ms. Lisa Almodovar, Senior Program Manager, U.S./Mexico Border Program from the United States Environmental Protection Agency. We also have at the dais, Ms. Maria Elena Giner, General Administrator of the Border Environment Cooperation Commission, and Mr. Gerónimo Gutiérrez, Managing Director of the North American Development Bank. I also want to recognize certain special invitees and VIPs in the audience, starting with the Honorable Gerardo Sanchez, mayor of the city of San Luis, Arizona; Lic. Carlos Hermosillo, presidente de la Junta Central de Agua y Saneamiento del Estado de Chihuahua; Ms. Patricia González, Directora del Instituto Cultural de México en San Antonio; our friend, Mr. Eduardo Bravo, chairman of the Board of Directors of the

NADB-BECC Public Meeting * Reunión Pública de BDAN y COCEF November 14, 2013 * 14 de noviembre de 2013

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Asociación de Empresarios Mexicanos in the United States; and Mr. Juan Manuel Fernández, who is president of the San Antonio Chapter of the Asociación de Empresarios Mexicanos; and finally, Mr. John Ellis, Vice-president of Communications and Membership for the San Antonio Economic Development Foundation. Thank you all very much for being here. At this point, I will turn the microphone over to our Board chairman, Dr. Madrazo, who will open the meeting with some remarks, followed by remarks from his co-chair, Karen Mathiasen. Dr. Madrazo. DR. MADRAZO: Thank you very much. It's a pleasure and an honor to be here with you. And I thank you very much for your presence. I will continue with some prepared remarks in Spanish. There is simultaneous translation for anybody who needs it. And then I will pass on the microphone to my co-chair, Karen Mathiasen. Nos complace estar hoy en la ciudad de San Antonio para celebrar la reunión pública del Consejo Directivo de la Comisión de Cooperación Ecológica Fronteriza y el Banco de Desarrollo de América del Norte. A nombre del Consejo Directivo les doy la bienvenida y agradecemos su presencia en esta ciudad. Hoy por la mañana iniciamos nuestra reunión, en la que tocamos varios temas de relevancia para ambas instituciones. Entre los resultados obtenidos hoy por ambos gobiernos, se acordó avanzar con el primer proyecto de energía renovable transfronterizo en la Sierra de Juárez, cerca de Tecate, Baja California para la construcción de un parque eólico que generará 155 megawatts de electricidad, la cual será vendida a la compañía eléctrica del Condado de San Diego en Estados Unidos. Se espera que este proyecto reciba un crédito del NADBank por hasta $50 millones de dólares y el promotor es la compañía de Infraestructura Energética Nova, mejor conocido como IENova. Este proyecto es un ejemplo de la colaboración transfronteriza y la evolución del sector energético que se avecina. Asimismo, estamos anunciando la certificación y financiamiento que se aprobó en días recientes para un proyecto de energía solar, Álamo IV, que será construido en la ciudad de Brackettville, Texas y que tendrá una capacidad de generación de casi 40 megawatts. El promotor de este proyecto es la empresa OCI Solar Power y está recibiendo un crédito del NADBank, también, por hasta $50 millones de dólares. La energía generada por este parque será comprada por la empresa CPS de San Antonio. Además, hoy serán desembolsados los recursos no reembolsables para dos de los primeros cinco proyectos que reciben financiamiento a través del Programa de Apoyo a Comunidades, mejor conocido como CAP, y que fueron aprobados durante este año. Nuevo Casas Grandes, Chihuahua y San Luis en Arizona recibirán $450 mil y $500 mil dólares, respectivamente. Si bien estos montos son relativamente pequeños, harán una gran diferencia, esperamos, en el mejoramiento de la infraestructura básica para las comunidades de ambos lados de la frontera que tienen poca o nula capacidad de endeudamiento y que, en consecuencia, esto ayudará a brindar mejores servicios en beneficio de sus residentes. Otro tema de gran importancia es que el Consejo ha aprobado una resolución que avala la participación del NADBank en el desarrollo de estudios para la identificación de


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proyectos prioritarios relacionados con la agenda del Diálogo Económico de Alto Nivel, HLED, iniciativa impulsada por los presidentes Enrique Peña Nieto de México y Barack Obama de los Estados Unidos. Y tiene el fin de promover la competitividad, la conectividad, el fomento del desarrollo económico, entre otras acciones. Creemos firmemente que el NADBank será una herramienta muy útil en el desarrollo y financiamiento de proyectos que generen la competitividad económica de esta importante región, tales como los puertos de entrada, transporte, infraestructura carretera y, como ya se está dando, transmisión binacional de energía, entre otros. Para el final, deseo destacar que la COCEF y el NADBank están por cumplir ya 20 años y ésta acertada la decisión de los gobiernos de ambos países de crear a estas instituciones y está rindiendo frutos. Nunca antes en la historia de los dos gobiernos se había dado una colaboración tan importante en materia de conservación ambiental y desarrollo de infraestructura, que está permitiendo sanear nuestras fuentes de agua, nuestros suelos y el aire que compartimos ambas naciones. En sus ya casi 20 años de operación, COCEF ha certificado 226 proyectos de infraestructura y por su parte el NADBank está otorgando más de $2,250 millones de dólares en créditos y recursos no reembolsables para apoyar el desarrollo de 192 de estos proyectos. Esto enfatiza el grado de colaboración que han alcanzado estas dos instituciones. Deseo felicitar a COCEF y al NADBank por su próximo 20 aniversario y la trascendental labor que están logrando, juntos, para mejorar la vida de más de 14 millones de residentes en la frontera de ambos países. Agradecemos nuevamente su presencia aquí el día de hoy y estamos atentos a sus comentarios. Ése es el propósito de la reunión, un dialogo, que es parte intrínseca a la organización de estas dos instituciones. Cedo la palabra ahora a Karen Mathiasen, Directora de la Oficina del Banco de Desarrollo Multilateral del Departamento del Tesoro de los Estados Unidos y copresidente del Consejo. Muchísimas gracias. Madam Co-chair, please. MS. MATHIASEN: Thank you. Thank you very much. I've been to many of these meetings, and I think the benefit for us is to hear from you, so I'm going to be extremely brief. I think there's a press release that provides an excellent overview of what we discussed today, and as my co-chair summarized, I think you have a good sense of what we addressed, what we agreed to, and the only thing I would like to add is that we do remain very strongly supportive of the institutions, both BECC and the NADBank, and have full confidence in its leadership and continue to feel that the stewardship of resources, project development, project implementation are all excellent. Thank you. MR. FLORES: Thank you very much, Mr. Chairman, Madam Co-chair. Is there anyone else among the members of the Board that would want to offer any brief comments at this point? If not, then we'll proceed with the rest of the agenda. Historically, at this point in the public meeting, the Managing Director of the Bank and the General Manager of the BECC would give a verbal status report to the public using a PowerPoint presentation. This will be the second meeting in which we look to do this with a video instead. I think it was a successful endeavor last time, and so at this point we'll proceed with the video status report. [ VIDEO ]


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NARRATOR: Since its last meeting in May, the Board of Directors of the North American Development Bank and its sister institution, the Border Environment Cooperation Commission, has approved the certification of six new projects, along with approximately $68 million dollars in loans and grants to implement them. Altogether, these projects represent a total investment of $84 million dollars, mostly in renewable energy, as well as better roadways and improvements to a wastewater collection system. These projects include: Four solar energy parks with a combined generation capacity of 14.5 megawatts located in the communities of Ramona and Valley Center in San Diego County, California. Altogether, these projects will generate sufficient power annually for approximately 5,500 homes and will displace an estimated 9,950 metric tons of carbon dioxide per year, equivalent to eliminating about 2,070 vehicles from the road. NADB is providing loans totaling up to $58.3 million dollars to support these projects. In addition, a street paving and rehabilitation project was approved for San Luis Río Colorado, Sonora. SR. JOEL ARMANDO REINA LIZÁRRAGA [Director de Obras y Servicios Públicos de San Luis Río Colorado, Sonora]: …y consiste en invertir en vialidades que den conectividad a la ciudad de los distintos puntos cardinales en la mancha urbana y consiste en disminuir, con estos proyectos de pavimentación, las partículas suspendidas en el aire que generan contaminación en el aire de la ciudad. NARRATOR: The $9.2 million dollar loan from NADB closed in September. Finally, a project to replace an undersized wastewater collector was approved in Nuevo Casas Grandes, Chihuahua, to receive a $450,000 dollar grant from NADB’s Community Assistance Program. SR. RAÚL JAVALERA [Presidente de la Junta Central de Agua y Saneamiento, Gobierno de Chihauhua]: Es un proyecto de un colector, el colector Felipe Ángeles, que consta de una tubería de 24 pulgadas con 33 pozos de visita y 65 tomas domiciliarias. NARRATOR: The new collector will ensure that up to 730,000 gallons a day of raw sewage reaches the city’s treatment plant. Overall, for the year to date, 17 projects have been approved for certification and financing by the BECC-NADB Board of Directors. MR. JIM DAVEY [Construction Manager for the City of San Luis, AZ project]: The project is a new 16-inch water main to connect the city’s older central water system with their new water system over on the east side of the San Luis Mesa. The waterline will be about 8,685 feet long and will connect a well site on the old system with a well site in the new system.


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MS. GINER: Border residents will benefit in a variety of ways once these projects are completed. Water-related projects will help ensure reliable drinking water services during the hot summer months in San Luis, Arizona, while improvements to the wastewater collection systems for five communities in Arizona, California, Chihuahua and Sonora will help prevent sewage spills and ensure the proper treatment and disposal of wastewater—and in some cases provide first-time service. Better air quality is also anticipated through the installation of almost 40 megawatts of solar energy generation capacity that will help displace an estimated 28,000 metric tons of carbon dioxide per year; while the paving of an estimated 658,000 square meters of dirt roads and other roadway improvements will help eliminate 437 metric tons per year of vehicular dust known as PM10. MR. LARS PETER [USA Director, T-Solar]: There are several environmental benefits. One is the increase of renewable energies in the United States, especially in the region. We will displace around 14,000 metric tons of carbon dioxide per year. So we are replacing pollution and other energy sources that pollute the air and cause emissions of carbon dioxide with a clean energy without noise. MR. GUTIÉRREZ: So far this year, NADB has contracted $300 million dollars in loans for eight projects; an additional $7 million dollars in grants for five projects through the Border Environment Infrastructure Fund, which operates with funding from the U.S. Environmental Protection Agency (EPA); and just over $2 million dollars in grants for the first five projects to be funded through the Bank’s new Community Assistance Program. With less than two months until the end of another successful year, we expect to contract an additional $100 million dollars in loans for four projects, including $50 million for the Alamo 4 Solar Park located in Brackettville, Texas. The electricity generated by this 39-megawatt solar plant will be purchased by CPS Energy here in San Antonio. NARRATOR: During 2013, eight projects began construction and six projects have been completed. These will help 13 communities provide better wastewater services or reduce air pollution through improved traffic circulation and the use of clean and renewable energy. As the twentieth anniversary of the establishment of BECC and NADB approaches, both institutions have managed to overcome many challenges associated with the development of environmental infrastructure in communities on both sides of the U.S.-Mexico border. MS. GINER: We have certified 226 projects worth an estimated cost of $6.6 billion. This year BECC has also approved technical assistance in the amount of $3 million dollars in 27 communities in eight border states under EPA’s Border 2012 program and PDAP, as well as BECC funds. In addition to infrastructure projects, BECC continues to support the border states in providing sound public policy. This year we focused on the state climate action plan in the states of Baja California, Sonora, Chihuahua and Tamaulipas. At the request of the Mexican Secretary of the Environment, BECC concluded a needs assessment for a


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regional landfill program in the six Mexican border states to determine the investment needs for the region. MS. YAZMIN ARELLANO [Public Works Director, City of Brawley, CA]: If this project is not carried out, funded by the Community Assistance Program by NADBank—usually known as the CAP—we could face sanitary and health conditions to the residents, as well as potential fines by the California Regional Water Quality Control Board. NARRATOR: Projects funded by NADB and BECC are contributing to a better quality of life for more than 14 million border residents. Looking toward the future, NADB and BECC are currently reviewing 28 potential projects throughout the border region in the areas of renewable energy, transportation, and water and wastewater improvements that could receive up to $600 million dollars in loan funds and $40 million dollars in grants. MR. CHARLES HOSKEN [Chief Operating Officer, SunPeak Solar, LLC]: NADBank was wonderful to work with. You know, I think it was their first solar project, so we kind of learned together. But I’ll tell you what, they are great folks to work with. I wish they were a little closer than San Antonio. But, you know, when you work with a banker that’s very interested in the success of the project, everybody wins. And that’s what we have with NADBank. Very happy to have a relationship with NADBank. NARRATOR: The North American Development Bank and Border Environment Cooperation Commission—improving the quality of life in the U.S.-Mexico border region.

[ APPLAUSE / APLAUSO ] MR. FLORES: Thank you, everyone, and now at this point, before moving into the public comment period of the meeting, we do have a ceremonial item. We want to recognize the representatives of two communities that have projects being funded through the Bank's Community Assistance Program, better known as the CAP. The CAP is funded with retained earnings from the Bank's loan portfolio, and the purpose of the CAP, the mandate that the Board of Directors has given to the institutions for this money, is to find projects in small and traditionally underserved communities throughout the border region that may not have neither the financial or institutional capacity to loan finance needed infrastructure and to provide grant monies in order to bring these projects to fruition. The first project that we want to recognize is that of a new water transmission line for San Luis, Arizona, and I think we have—there it is--the slide giving some basic information on this project. The project sponsor is the City of San Luis, Arizona, which is on the border, directly across from San Luis Rio Colorado, Sonora. The total cost of this project is US$631,176, and so those of you familiar with infrastructure will recognize this as a relatively very small project, but not small to the city of San Luis. It's of great importance. This project was certified on March 13th of this year. The NADBank is providing US$500,000, the vast majority of the funding for this project. The project includes the construction of a new 16-inch water transmission main, 8,700 linear feet of


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PVC pipeline, 21 resilient wedge gate valves—this is awfully technical information, I believe—one air release valve, two blow-off valves—that will mean more to the engineers, I think, than to the rest of us—but…but the project is very important in terms of allowing the city of San Luis to have potable water at the right level of pressure throughout the entire distribution system in order to avoid backflows, which are risks to public health. So the benefits of this project include increasing the system capacity, providing two-way directional flow for the transfer of up to three million gallons per day of water to meet the daily peak demand, particularly during the summer months. And so at this point, I'm going to ask our co-chairs, Dr. Madrazo and Karen, and Maria Elena and Geronimo, if you don't mind, just stepping to the very front of the dais here, and I want to invite Mayor…the Honorable Gerardo Sanchez, please, to come up front, and Jorge Silva is going to bring the check. I hope that your wallet is big enough to fit that check. And we'll just ask you to come to the very front here where the photographers can capture you presenting the check.

[ PRESENTATION OF CEREMONIAL CHECK / PRESENTACIÓN DEL CHEQUE

CEREMONIAL ] [ APPLAUSE / APLAUSO ] MR. FLORES: Mayor Sanchez, at this time, if you would like to give some remarks to the public, we would invite you up to the microphone, please. MR. SANCHEZ: Well, first and foremost, I would like to thank you. Thank you NADBank for considering our project. One of the comments earlier mentioned that it was a low amount. It was close to US$450,000 that NADBank was going to help us with. To the city of San Luis, it's a big difference. To the city of San Luis, this means that we can guaranty our water system for the next ten years, which means uniting an old system and a new system and being able to guaranty water for the next ten, fifteen years, and it makes a big impact. We do…it's a small community. It's predominately agricultural workers, seasonal workers. Our unemployment reaches 55, 60% during the summertime. So it's…it’s been a challenge, especially since 2008. But, with your help, thank you, and on behalf of the City of San Luis, my half, myself, and city council, we really appreciate it. We're very proud to be your first recipients of this grant, and thank you. Gracias. [ APPLAUSE / APLAUSO ] MR. FLORES: I'm sorry, I should have had you stay up to the front here, but we're going to have one more, and here we are. Este proyecto es un proyecto que consiste de la construcción de un colector de aguas residuales para el Municipio de Nuevo Casas Grandes, Chihuahua. El promotor del proyecto es la Junta Central de Agua y Saneamiento de Chihuahua. Este proyecto lleva un costo total de $500 mil dólares. El proyecto fue certificado el 22 de julio de este año y recibirá financiamiento del Banco del programa PAC, en español, de $450 mil dólares. Los componentes del proyecto consisten del colector Felipe Ángeles que llevará 2,200 metros lineales de colector, la red de atarjeas de 1,772 metros lineales, construcción de 33 pozos de visital. Y los beneficios serían de prevendrá la descarga de hasta 32 litros por segundo de aguas residuales no tratadas y se eliminarán los posibles riesgos


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ambientales y sanitarios asociados con los derrames de aguas negras. Entonces, en seguida, quiero invitar al Lic. Carlos Hermosillo, el presidente de la Junta Central de Agua y Saneamiento, que venga adelante por favor para recibir el cheque, gracias.

[ PRESENTATION OF CEREMONIAL CHECK / PRESENTACIÓN DEL CHEQUE

CEREMONIAL ] [ APLAUSO / APPLAUSE ] SR. FLORES: Lic. Hermosillo, le invitamos a dar la palabra, por favor. SR. HERMOSILLO: Buenas tardes. Saludo con aprecio a las autoridades de la Comisión de Cooperación Ecológica Fronteriza, como a su institución hermana el Banco de Desarrollo de América del Norte, a quienes agradezco y les reconozco el compromiso con la zona fronteriza durante casi 20 años, de celebrar su atinada puesta en marcha. La cooperación y el dialogo entre naciones unidas, más allá de la obviedad y los evidentes beneficios adquiridos, representa la oportunidad de empatar lo mejor de dos naciones, aportando en conjunto una solución a los inminentes impactos de equilibrio ecológico mundial, además de beneficiar directamente a quienes representan el eje toral de las políticas públicas de la sociedad en conjunto. La Junta Central de Agua y Saneamiento, estamos convencidos de que las obras de alto impacto social son la mejor inversión pública, dotando de condiciones necesarias a las comunidades mediante el trabajo que habremos de implementar en conjunto con acciones como las que pondremos en marcha. Y aquí es donde hago llegar mi reconocimiento al Lic. César Duarte Jáquez, Gobernador Constitucional del Estado de Chihuahua, quien a través de su plan estatal de desarrollo ha plasmado que este tipo de proyectos son prioritarios en su visión de gobierno. Además, se nos ha manifestado la premura y la urgencia de acelerar el trabajo para satisfacer las demandas respecto a este tema tan sensible como es el de las condiciones del vital líquido. En el tema que hoy nos ataña, es el proyecto del colector Felipe Ángeles, cuya inversión fue de $569 mil dólares, algo así como $7.3 millones de pesos, que fue financiado gracias a la aportación del BANDAN por $500 mil dólares y el resto bajo el programa APAZU 2013,1 a través del que se ha suministrado el material necesario para la obra que consta de 369 tubos de 61 cm de diámetro y que en su conjunto conforman una extensión mayor a los dos kilómetros. Con este colector ubicado en Nuevo Casas Grandes se dará suficiencia al desalojo de agua residual de diversas colonias del municipio. Además dar servicio adicional para 65 familias quienes utilizan letrinas y quienes dejarán de contaminar el subsuelo mediante filtraciones y reduciendo el riesgo de contraer enfermedades de origen hídrico y contando con un servicio digno. Asimismo, me es grato resaltar que con la construcción de la planta de tratamiento Juárez Sur-Sur, cuyo avance de la obra se estima en más de un 80 por ciento al día de hoy, con los proyectos realizados con el apoyo de COCEF y BANDAN en las localidades de Guadalupe y Praxedis Guerrero, se estará tratando el 100% del agua

1 Programa de Agua Potable, Alcantarillado y Saneamiento en Zonas Urbanas (APAZU).


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residual generada en todo el Valle de Juárez. Bajo estas premisas, resulta fundamental los esfuerzos en estos ejes torales para el desarrollo de la región. Por lo que el día de hoy aprovecho para solicitarle, respetuosamente, tengan a bien a dar su venia para el proyecto de agua potable propuesto para la comunidad en Flores Magón bajo la operación de este mismo programa, así como para los proyectos propuestos para el año 2014, con lo que se presente…se pretende, perdón, beneficiar 10 comunidades más en los municipios de Ahumada, Ascensión, Buenaventura, Casas Grandes, Guadalupe Distrito Bravo y Janos. Estoy cierto que nuestra petición encontrará eco, ya que ha quedado de manifiesto la voluntad y el gran entusiasmo de realizar obras en pos de una mayor calidad de vida para los ciudadanos. Les reitero nuestro compromiso, nuestra admiración y estamos seguros que Chihuahua vive cuidando el agua. Muchas gracias. [ APLAUSO / APPLAUSE ] SR. FLORES: Muchas gracias por esas palabras Lic. Hermosillo. At this point in the meeting we will begin to hear comments from the people who have registered to provide public comments, and at this time I'd like to start by calling Mr. Go Mizoguchi, Deputy General Manager for Power Projects, Development Division of Mitsui & Company Limited. MR. MIZOGUCHI: Hi everyone, thank you very much for the introduction. My name is Go Mizoguchi, with Mitsui & Company, which is one of the oldest and the largest trading and investment companies in Japan. Taking this opportunity, I'd like to introduce the… my company, Mitsui & Company, and what we do in Mexico. To begin with, who Mitsui is. We are—sorry for the small letters. I apologize. We are…we established…the former Mitsui was established about 140 years ago. It’s a very old company. One of the business family, Mitsui, founded that company. We have about 6,000 employees and on the consolidated basis we have 40,000. We are a fairly big company in Japan. We do many things all over the world, and we have the sixth…we have the offices in 66 countries. We are financially healthy, luckily, and we do many things. Our…we have about… Of 12 business units in the company, I belong to infrastructure business unit, which does the development and the operation of the infrastructure projects all over the world. This is what we do in Mexico. I start with the power projects. We do own six power stations—gas-fired power stations—and one wind farm in Mexico. And we do the operation by ourselves for the five power stations in Mexico. Next one is the water project. We have a number of water projects for PEMEX or many parties in Mexico. We have a big area of operation in Mexico. Lastly, the natural gas sector, we do have the energy terminal in Manzanillo, Mexico, and also, we are now under construction on the gas pipeline on the U.S. side, on the top left in this picture. On the…a bit about the project. We are planning to participate in the competitive bid for the gas power project in Ensenada, Baja, California, Mexico, which has been developed


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by the CFE, the Mexican power authority.2 The project is based on the long-term power purchase contract—a 25-year power purchase contract with CFE—and the fuel supply will be made by CFE for the same term, 25 years. We have been in close communication with NADBank for this project, and we are considering the full financing of this project between the NADBank and the Japanese banks. And for this project we are planning to develop gas-turbine combined-cycle technology which is…which has been very much proven in the 40 years in the market, and also the high efficient, which means very environmental friendly technology. And we're going to use the water from sea water, and we plan to minimize the water intake from the ocean to be environmental friendly. The project schedule, we are going to submit a bid proposal to CFE next Tuesday, and we are expecting to execute the PPA early next year.3 And lastly, the map shows where the project locates. The Baja California III project will be located about 40 miles south from the border, on the…right next to the Energía Costa Azul energy receiving terminal. As I mentioned earlier, the fuel supply is under the CFE responsibility, so we don't know where the gas comes from, but we believe…we think that the gas might come from, either from Energia Costa Azul or from the imports, the gas imported from U.S. Thank you very much. I’m very happy to be here and I’m looking forward to continue the discussion with NADBank. Lastly, I heard that our application will be delivered to the Board members in the next few weeks. I would be grateful if you can review the application, at your earliest convenience, and hopefully by the time of the execution of the PPA, by the end of next January. Thank you very much. [ APPLAUSE / APLAUSO ] MR. FLORES: Thank you very much, Mr. Mizoguchi. Now, next I'd like to call Mr. Lars Peter. You've seen him on the big screen and now you get to see him in person. So, Lars? USA Director for T-Solar. MR. PETER: Thank you and good afternoon, everybody. I'm presenting Grupo T-Solar and our recently financed—NADBank financed our project in the Imperial Valley. First of all, I was making memories and I said, ‘oh, I was here first time one year ago when we started the financing.’ We kicked off the whole thing. And now I'm actually here to say we've reached commercial operations a few days ago. So I'm happy to be here. Thank you very much, and it's a pleasure for me to say we got there. We got there together. And it's thanks to NADBank and BECC. A few details about the project. It's a 20-megawatt nominal power solar project in Imperial Valley. It's a crystalline and solar modules, 85,000 modules on a single-axis tracking system. You have seen some pictures on the video. And the interesting thing is the benefit for the people in El Centro and in Imperial Valley. You might know the Imperial Valley is hit very hard by unemployment, and we provided work to 250 people during construction. So there was a big impact on the labor market in El Centro. And then, of course, it's clean energy. We are providing green and clean energy for 7,500 households, more or less. There's no impacts, no noise, nothing, all clear down. We will

2 Comisión Federal de Electricidad (CFE). 3 Power purchase agreement (PPA).


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improve the environment around the installation, because we are improving roads, we are contributing to some local parks, so there's really a benefit for the people down there in Imperial Valley. And the second point I would like to mention here is our experience with the guys from NADBank and BECC. I met them first one year ago, and I had from the right beginning the impression that the people know what they're talking about, so they know a lot about clean energy and solar projects in the U.S. It was our first solar project, and we made our…it's an experience as well. But everything went well. And they’re very helpful, and I'm really happy to say we got there a few months ago with the finance, and now we get also the commercial operation. So thank you very much to NADBank and to BECC, and I think this is the beginning of a story of success and hopefully we can do more business together. Thank you very much. [ APPLAUSE / APLAUSO ] MR. FLORES: Thank you, Lars. And if I may, I'll mention that I just heard this morning from your colleague in Madrid, Iván Paja, that we're looking at—for the benefit of the Board members—T-Solar is looking at a date of December 11th for a ribbon-cutting ceremony in the Imperial Valley to commemorate the start of commercial operation of the project. So you'll be receiving an invitation to that shortly. Congratulations. Next, I would invite Mr. Gerardo Omaña, representing Agua Total, S. A. de C.V. SR. OMAÑA: Muy buenas tardes. Muchísimas gracias por invitarnos. Es la primera ocasión que estamos aquí. Con mucho beneplácito vemos y conozco ahora a la Comisión y me da mucho gusto porque nos da la oportunidad a empresas de poder exponer. En nuestro caso, Agua Total, somos una empresa mexicana. Estamos en el Distrito Federal y veo con mucho agrado cómo T-Solar está desarrollando energía con sus paneles solares. La pregunta es, aparte de tener esa producción de energía, ¿por qué no, en forma paralela, la vamos ahorrando? Nosotros sabemos que para la conducción de agua, que es nuestra especialidad, como en el caso de nuestro compañero de Chihuahua, toda la conducción de agua requiere de equipo de bombeo. Y el equipo de bombeo representa el 60% del egreso de todos los organismos operadores. El consumo eléctrico por bombeo limita mucho desarrollo para el manejo del agua. Hoy día, Agua Total, tenemos nosotros, 10 años desarrollando un sistema de ahorro de energía que garantiza del 15 al 25% la disminución en el consumo eléctrico. Hemos estado nosotros en la parte fronteriza en Tamaulipas, haciendo esta propuesta, a sabiendas de que garantizamos que de 24 a 36 meses se recupera la inversión. Realmente la experiencia que tenemos nosotros para lo que es el planteamiento de inversiones como las de ustedes, no la tenemos, pero lo que sí sabemos es que tenemos la mecánica, el conocimiento y la experiencia para poder ofertar un programa sustentable de ahorro de energía y recuperable de 24 a 36 meses garantizados.


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Nuestra propuesta, rápidamente, la vamos a ver. Seré muy breve. En nuestra empresa, tenemos 20 años de experiencia en el mercado mexicano. Realmente nuestra labor es conjuntar las tecnologías para desarrollar estos programas sustentables y vamos a ver rápidamente en qué consiste el programa. Es la disminución en el consumo eléctrico, en los equipos de bombeo, mediante el control inteligente, que es la instalación de un sistema de control que va a eficientar el sistema operativo de los equipos de bombeo. Tenemos 10 años operando en México y hemos ahorrado energía suficiente para poder alumbrar a la Isla de Cozumel por dos años. Es el resultado de esa tecnología. Son los equipos instalados. Son proyecto que hicimos en la ciudad de Puebla. Como ejemplo puedo decirles que la Ciudad de México, el sistema operador de la Ciudad de México, gasta 1,600 millones de pesos anuales en pago a la Comisión Federal de Electricidad. Estamos por desarrollar este programa. Estamos buscando el fondeo de 50 millones de dólares para desarrollar este programa, recuperable a 36 meses. El sistema dura ocho años más, así que es un proyecto que, ojalá ahora que conozco a los señores de la Comisión de Cooperación, podamos permitirnos acercarnos a ustedes y ver la manera de que todos los sistemas de la frontera puedan accesar a este proyecto y a este programa. Hemos intentado hacerlo, nada más que yo no tenía la forma de cómo consolidar el cobro nuevamente a los organismos operadores, pero yo creo que con la ayuda de ustedes pudiéramos implementar un programa muy interesante de recuperación y compromiso de pago. Muchas gracias por permitirme estar aquí. Ha sido un honor conocerles y espero estar nuevamente con ustedes. Muchas gracias. [ APLAUSO / APPLAUSE ] SR. FLORES: Muchas gracias Sr. Omaña. Enseguida invitamos al Lic. Jorge Leal de Asesores y Promotores Ambientales, Legales y Administración para dar la palabra, si se encuentra presente. Lic. Jorge Leal. ¿No? Bueno, entonces enseguida invitamos a Steve Niemeyer, if he’s back in yet. Okay. I think… We'll give Mr. Niemeyer, who represents the Texas Commission on Environmental Quality, just a moment to get back. We do have one letter that was submitted to the Board of Directors and, with your permission Mr. Chairman, I'll quickly read the letter into the record, and you've been provided copies. The letter is from the Arizona Department of Environmental Quality signed by Mr. Henry R. Darwin Director, addressed to the Board of Directors, regarding the process for applications and selection of projects through the Community Assistance Program.

‘Dear Sirs/Madams: Thank you for the opportunity to provide suggestions on enhancing the programs and services offered by the binational institutions of the Border Environment Cooperation Commission (BECC) and the North American Development Bank (NADB). Our comments for consideration during your


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November 14, 2013 Board of Directors meeting are focused on the Community Assistant Program (CAP). The CAP is a great program that could be utilized to assist many struggling communities along the Arizona border that have small environmental improvement projects, but need some assistance to initiate. An Arizona community that has received this type of support from CAP is San Luis and we are grateful that this was one of the first projects to receive funding from the program. We realize that numerous applications requesting assistance from the CAP were received by BECC/NADB and that the institutions are considering funding additional projects from the historic list of applicants. The original CAP application process was not well advertised in Arizona and even our Office of Border Environmental Protection was unaware that the program was accepting applications until after the process was closed. As such, ADEQ requests and recommends the following:

That the BECC/NADB Board of Directors allow new applicants to apply and be accepted into the program.

That an additional criterion be used for selecting projects in the U.S. to adequately distribute projects in the 100-Km region, since there is a wider region applicable for projects in Mexico.

That there is an increased effort to coordinate with states in promoting the CAP, identifying potential projects, and final selection of projects.

ADEQ's Office of Border Environmental Protection is available to coordinate with you on future potential projects through the CAP. Please feel free to contact Ms. Edna Mendoza...’

…etcetera. I won't read the contact information. Again, signed by Mr. Henry R. Darwin, the Director of the Arizona Department of Environmental Quality. Yes? MS. MATHIASEN: Thank you very much. I just wanted to make a couple of comments on the letter and say, first of all, this is very welcome. This is the kind of feedback and input that we value. The CAP is a relatively new program, and I just wanted to let people here know, since there has been interest in it, that there will no longer be a specific application period, that the application process will be open at all times. It will not be time limited. And that information will be dispersed soon. And that with respect to the project selection, we do…we do look to balance projects on the two sides of the border, and my understanding is right now we have achieved a close balance. I think there may be three on one and four on the other. So when the BECC and the NADBank issue the new guidelines—which will be very soon, as I understand—it's my hope that they will be widely, widely disseminated, so all the stakeholders are more aware of the project and how to apply and become eligible. Thank you. MR. FLORES: Thank you, Madam Co-chair.


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Steve Niemeyer, in representation of the Texas Department of Environmental Quality. MR. NIEMEYER: Thank you very much, Mr. Chairman, Ms. Mathiasen, members of the Board, Maria Elena and Geronimo, thank you very much. I like to make these spectacular entrances, so you can see how brilliant I am, and I appreciate that you tolerated that. In any case, I just want to say one thing and that is my dad has always said: ‘Them that can brag without lying, let’em brag.’ And I just want to brag on the staff and management of the BECC and the NADBank and the cooperation [unintelligible] has received from them over the past 20 years, and especially earlier this year. Then Commissioner Rubenstein—who's gone on to bigger and better things—we met with Geronimo and Alex and asked for support for some meetings. We were having a critical situation with lack of water in the lower Rio Grande Valley, and they sent someone to meet. We had meetings four days over two weeks, with various water supply corporations, cities and irrigation districts to ensure that people in the lower Rio Grande Valley got water. And they ably supported our request. And then at a meeting in May—that was in March—the BECC sent someone, after we spoke with Maria Elena, to meet with cities and communities and water supply corporations again. And we had a drought meeting in McAllen, and I will tell you that I met with one of the irrigation district managers, with the manager for a water supply corporation. This guy is never happy. Never. And after meeting with different funding agencies, and especially what the BECC could do through some of their programs, he was so happy. And I just want to tell you, you know we've had great cooperation with the folks from the BECC and the NADBank for years, and this year it continues to be that way. That’s it. On behalf of Chairman Shaw, who could not be here, I just wanted to say that. Thank you. [ APPLAUSE / APLAUSO ] MR. FLORES: Thank you, Steve. Señor Presidente ahora si contamos con la presencia del Lic. Jorge Leal, en representación de Asesores y Promotores Ambientales, Legales y Administrativos. Le invitamos que dé la palabra. SR. LEAL: Si, buenas tardes. Primeramente, quiero agradecer la invitación que se me hace por parte de COCEF y de NADBank y simplemente, nomás, yo quería hacer el comentario que en todos los proyectos me ha toca…me ha tocado ahorita, ya no estoy en gobierno y estoy participando. Y, la verdad, es una excelente propuesta que tienen los municipios. Yo nomás simplemente quisiera agregar que estaría bien que en los proyectos se dé más importancia a los ciudadanos, especialmente en materia…hay gente que en muchas ciudades, debería tomárseles en cuenta el tema ambiental para que sean ellos los que den la continuidad en los cambios de administración. Y la otra, es en la ejecución de la cuestión legal. Porque hay municipios, organismos operadores, que tienen la legislación y hay que darles esa importancia para poder


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ingresar recursos. Simplemente, son instrumentos que son importantes para que se lleven a cabo. Y ahora vengo como parte de Asesores y Promotores Ambientales. Doy asesoría a comercio, a industria y simplemente que nos apoyen ahora que estoy de la otra parte para tratar de hacer proyectos con beneficio a la comunidad y que esté involucrado totalmente lo que es la educativa, la social y la política. Muchas gracias y muchas felicidades. [ APLAUSO / APPLAUSE ] SR. FLORES: Muchísimas gracias Lic. Leal. Si hay alguien más del público que gustaría dar la palabra en este momento, los invitamos. If there is anyone else present from the public that would like to make any remarks before the Board of Directors, we would invite you to do so now. Going once, going twice. With that, Mr. Chairman, that concludes the public comment period of the meeting. I turn the microphone back over to you for closing remarks from the Board and then following that, we'll adjourn for a reception hosted by the two institutions in the atrium of this building on the first floor. Everybody present is invited. DR. MADRAZO: Thank you very much. I would like first to ask both Geronimo and Maria Elena and Board members if they have anything they would like to add for concluding remarks? Any other Board members? Madam Co-chair? Well, then I would just like to thank all of you for being present for the current meeting. I think it has been a very successful meeting. We had a very productive Board meeting this morning, and we looked, first of all, at quality information and reports and resolutions to be brought before the Board by the joint administrations, and they have very close cooperation, and we look forward to future meetings that are as productive. And part of that quality work that is being done by BECC and NADBank is being open to the public, so we thank all of you for participating in this meeting. And having said that, we will now be able to adjourn the public part of our meeting, and we invite all of you to the atrium downstairs. Thank you very much for being present. Thank you for your participation. [ APPLAUSE / APLAUSO ] [ MEETING ADJOURNED / CONCLUYÓ LA SESIÓN ]


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ATTACHMENT / ANEXO

WRITTEN COMMENT RECEIVED / COMENTARIO RECIBIDO POR ESCRITO

public meeting of the board of directors november 14, … meeting of the board of directors november...

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