Just three days after Mexican President Andrés Manuel López Obrador announced a “pause” in his country’s relationship with the U.S. embassy, the North American Development Bank, a binational institution that finances infrastructure projects along the U.S.-Mexico border, will host its annual summit in San Antonio.
Government officials from both countries will spend Thursday and Friday in San Antonio, home of NADBank headquarters, along with project developers, financial institutions and environmental experts eager to develop innovative sustainable infrastructure projects that will facilitate economic development and benefit the day-to-day lives of the nearly 20 million residents living in the region.
This latest blip of tension between the countries — López Obrador accused U.S. Ambassador to Mexico Ken Salazar of violating Mexican sovereignty after he criticized López Obrador’s effort to reform Mexico’s judiciary — is not likely to affect the bank’s work, but it does highlight the looming uncertainty accompanying the upcoming change in both countries’ presidential administrations.
U.S. business interests are keen to increase their investments in “near-shoring,” or moving supply chains into Mexico, which is already the United States’ largest trading partner. Yet López Obrador has been cool to U.S. direct foreign investment, although it has grown under his watch.
Claudia Sheinbaum, who will take office on Oct. 1, is considered a protegé of López Obrador, but she’s also an environmental scientist who has signaled more openness to foreign investment — and the coming energy transition — than her predecessor.
That could mean a boost for infrastructure development financed by NADBank, which was born out of the North American Free Trade Agreement signed in San Antonio in 1992.
Funded and managed by both countries, for the past 30 years the bank has provided financing and expertise for hundreds of projects on both sides of the border, including water and sanitation, bridges and border crossings and sustainable energy.
A new U.S. leader
Leadership of the bank alternates between the two countries every four years, and in January, John Beckham became NADBank’s most recent managing director. He moved to San Antonio from Washington, D.C. after a career in social and economic investing that included almost two decades focused largely on renewable energy projects in Latin America.
With a Mexican mother and North American father, Beckham is bilingual and bicultural. He grew up on the border — but not the one most people assume.
“I grew up on the Great Lakes, just south of Detroit, Michigan and Windsor, Ontario,” said Beckham, who spoke to the San Antonio Report last week from his corner office overlooking the San Antonio River on the third floor of the downtown International Building.
He will welcome attendees to the summit Thursday morning before a keynote featuring former U.S. ambassador to Mexico Antonio Garza and former Mexican ambassador to the U.S. and former NADBank managing director Gerónimo Gutiérrez Fernandez.
Beckham told the San Antonio Report last week that while NADBank must be “responsive” to the priorities of each country’s presidential administrations, “we’ve seen a sustained commitment” to the bank’s objectives by both governments over the past three decades.
He noted that with the signing of the updated free trade agreement in 2020, U.S. and Mexico both committed to boosting the bank’s capitalization to close to $1 billion. The U.S. has paid its increased share, he said, and Mexico has committed to a payment plan to do so.
Thus far, with roughly $405 million in capital from the two countries, the bank has distributed roughly $3.1 billion in loans and grants, plus another $722 million in grants funded by the U.S. Environmental Protection Agency for municipal drinking water and wastewater projects that would otherwise be unaffordable for the communities where they’re located.
All together, the bank reported a total investment of $11.5 billion into 306 projects by the end of 2023. Yet the need for continued infrastructure development remains great.
“If we don’t have a sustainable and clean environment in which people want to live, work and play, trade doesn’t mean anything,” said Beckham.
Focus on water reuse
This year’s summit will cover water, energy, mobility and sustainable production. Water projects remain a priority for NADBank, Beckham said.
“First of all, water is life, right?” he said. The dramatic increase in trade, economic development and population in the border region over the past 30 years is “a success story,” he said, but that growth, combined with more frequent and severe droughts, has caused increased stress on the region’s water sources.
In addition to more traditional water and waste water projects, the bank is looking more closely at water reuse, or “putting it through a couple different cycles before depositing it back into nature,” Beckham said, as well as “trying to make a culture of more efficient use of water — on both sides of the border, agriculture uses 80% of water. So we’re starting to get into that, but it’s new for us.”
Most of the projects NADBank finances are in partnership with governments and public agencies, but it has also successfully completed public-private partnerships, Beckham said, such as a desalinization plant in Ensenada, Baja California in Mexico.
He said the bank has not done any water-related public-private partnerships in the U.S. yet, “but our view is that needs to be an option on the table if we’re really going to address the water needs of our region.” Texas alone is estimated to need up to $60 billion in water investments in the coming years to meet demand.
National leadership uncertainty
Garza, who served as U.S. ambassador to Mexico from 2002 through 2009, said Mexico has “left investment opportunities on the table” under the López Obrador administration he hopes might be realized under Sheinbaum, especially in renewable energy and water.
“But she remains a question mark,” he acknowledged. In the U.S., he said a Kamala Harris administration would likely offer “a more institutional relationship” with Mexico that would offer “an opportunity for broader discussion along a whole range of issues,” whereas Donald Trump has talked about mass deportations and an increase in tariffs. The presidential election is on Nov. 5.
Garza will share the stage Thursday with Gutiérrez, whom he called one of NADBank’s strongest leaders to date. He believes Beckham, whom he met only recently, “will be building on that legacy.
“He’s the real deal as far as an investment banker goes,” Garza said, “and I think he has a very clear sense of where he’d like to move the bank.”
While San Antonio is home to NADBank’s headquarters, it is too far from the border to take advantage of its financing.
The bank is limited to developing projects within 62 miles north of the border in Texas, New Mexico, Arizona and California, and 186 miles south into the six Mexican states of Baja California, Chihuahua, Coahuila, Nuevo Leon, Sonora and Tamaulipas.
But San Antonio still gains, said Mayor Ron Nirenberg, who will deliver the luncheon keynote Thursday.
“San Antonio’s close ties and proximity to the border region mean that we benefit when the border region moves forward,” he said, with infrastructure projects that improve air quality, conserve water and develop renewable resources.
Beckham, who moved with his wife into the Camp Street Lofts and rides his bike to work most days — he doesn’t have a car — said he agreed with Nirenberg, and paraphrased something he said he’s heard the mayor say.
“San Antonio is where the United States and Mexico comes to talk,” Beckham said, and NADBank “is the most important binational institution to facilitate that.”
