DALLAS -- A manager and deputy manager for the new North American Development Bank could be announced as early as mid-October and about 10 staff members could be hired for the U.S.-Mexican bilateral financial institution by the end of the year, a federal Treasury official said yesterday.
"Both sides would like to hire a manager as soon as possible," said Mozelle Thompson, deputy assistant secretary for government financial policy at the U.S. Treasury, the lead agency in the bank's development. "Once we get a manager in place the rest should fall in line fairly quickly."
He said the bank board, which comprises three senior U.S. and three senior Mexican government officials, hopes to conduct final interviews for the institution's top executives at a meeting Oct. 12 and 13 in San Antonio. A "strong possibility" exists that the manager and deputy will be appointed then, Thompson said.
He said officials are still discussing whether to appoint a Mexican or a U.S. citizen to the manager's post, but should make a decision soon.
Talks about the bank have been continuing since last year when the U.S. Congress approved the North American Free Trade Agreement, which created the institution to finance environmental projects on the U.S.-Mexican border and to fund economic development programs.
Under the agreement, the United States and Mexico will jointly operate the bank, and each would contribute $225 million in paid-in capital over a four-year period. In addition, the two countries together would provide a total of $2.55 billion of capital on demand or callable capital during the same time period.
It is envisioned that the bank would be able to sell bonds and make about $3 billion in loans or loan guarantees in coming years. Eventually, those funds could be leveraged to attract billions more in private capital.
The U.S. government has already contributed its first $56 million appropriation as of Oct. 1, the beginning of the federal fiscal year, and the Mexican government has done the same, Thompson said.
With that money, between 10 to 12 U.S. and Mexican citizens will be hired to staff the bank headquarters in San Antonio. The bank will be located at an interim site in downtown San Antonio until a possible move to a final site at a proposed International Trade Center in San Antonio.
Once settled, the bank will start accepting applications for environmental and other projects, possibly as early as this year. "Things should soon be up and running," Thompson said. But, he said, "I don't want to predict timing."
Before applications are accepted, the related Border Environmental Cooperation Commission has to start operating and certifying water, wastewater, and other environmental projects for North American Development Bank financing. The bilateral U.S.-Mexico commission has scheduled its first meeting for Oct. 12 in its headquarters city, Juarez, Mexico, which is across the border from El Paso, Tex., and is expected to approve a manager and deputy manager at that meeting, sources said.
They said a U.S. official is expected to be named manager of the commission because of a strong push by environmentalists who want the commission chief to be American. That means the commission's deputy manager would be Mexican and the bank would have a Mexican manager and a U.S. deputy manager, in an attempt to evenly distribute the power between the two Countries, sources said.
An aide for U.S. Rep. Esteban Torres, D-Calif., who led the Latino contingent that resulted in creation of the bank, said he has been told that managers for both the bank and the commission would be selected in October and the bank would open in November.
"We had hoped it would open by mid-October, but if it slips a month, it is not a tragedy," said Albert Jacquez, chief of staff for Torres. "I am not discouraged."
Jacquez said he hopes the bank and the commission start taking applications for projects before February, when the new U.S. budget cycle begins for the next fiscal year. "You can't come up and ask for more money unless you have a track record, and Treasury knows that," he said.
Jacquez said many people already were preparing applications for the financing. "The litmus test for us is whether they will be able to finance projects by the end of the year," he said.
So far, the specific financing structures have not been determined, partly because the bank is a new organization and partly because each government entity applying would have different needs. "We are going to have to look at these projects on a case-by-case basis," Thompson said.
Plans call for combining public and private sector money from various sources, including development banks, private capital, and government grant programs.
About 90% of the financing will go to environmental projects on the border while 10% will be allocated for the community adjustment program to compensate municipalities for job and economic losses stemming from the passage of Nafta.
A branch office for the North American Development Bank will be set up in Los Angeles. Jacquez said the California office is expected to be open by the end of the year, although no determination has been made yet on the staff size or the parameters of the program.