DALLAS -- The U.S. and Mexican governments have officially announced the six board members for the North American Development Bank scheduled to open later this year to fund environmental projects along the border of the two countries.
As expected, the White House appointed Treasury Secretary Lloyd Bentsen, Secretary of State Warren Christopher, and Environmental Protection Agency administration Carol Browner.
The appointments were made in an executive order signed by President Clinton and announced last week by the Treasury Department, which is spearheading the U.S. effort to establish the bank created as part of the North American Free Trade Agreement.
On the Mexican side, the government named Secretary of Finance Pedro Aspe, Secretary of Trade and Industry Jaime Serra, and Secretary of Social Development Carlos Rojas.
Both the Mexican and U.S. board members have designated alternates to carry out the functions of the board, which will oversee operation of the bank and approve its budget as well as lending and guarantee operations.
For the United States, the alternates are Jeffrey Shafer, the Treasury Department's assistant secretary for international affairs; Alexander Watson assistant secretary of state for inter-American affairs; and Robert Sussman, deputy administrator for the EPA.
For Mexico, the alternates are Guillermo Ortiz, undersecretary of finance; Herminio Blanco, undersecretary for international negotiations in the trade and industry department; and Miguel Limon, attorney general for environmental protection in the department of social development.
When the announcements were made, Bentsen and Aspe both agreed that one of the highest priorities will be to identify a manager and deputy manager of the bank. Sources said that more than a dozen names have been brought forward and that one of the bank's top executives will be American and the other Mexican.
Although no details have been available on the timetable for hiring, Ed Knight, Bentsen's senior adviser, said in an earlier interview, "We expect to have a manager and key staff in place by Oct. 1."
Plans call for opening the development bank at the beginning of the federal fiscal year on Oct. 1, when the United States will put in $56 million for first-year funding. Mexico also will contribute $56 million when its budget year begins on Jan. 1 1994.
In total, the two countries will each contribute $225 million of paid-in capital for $450 million over a four-year period. Further, both countries will provide a total of $2.55 billion of capital on demand or callable capital during the same period of time.
It is envisioned that the bank will be able to make between $2 billion to $3 billion in loans and loan guarantees. Eventually, those funds could be leveraged to attract up to $20 billion in private and public capital.
The development bank would be headquartered in San Antonio, where 90% of the funds would be dispersed for projects certified by the separate, binational Border Environmental Cooperation Commission in Juarez, Mexico. Water and wastewater treatment projects are being targeted.
In addition, a development bank branch that would provide funds for community adjustment programs to offset worker displacement and economic losses from Nafta will be located in Los Angeles. Ten percent of the funds would be set aside for that purpose.
An advisory committee for the development bank is expected to be named this summer and details on the financial and operational structure hammered out later this year.
In a statement issued last week, Bentsen said that the bank would help mobilize financing on the border, but he added that the wanted to be realistic.
"This isn't an institution for subsidized finance -- NADBank environmental loans and guarantees must be serviced fully and on time. Separate U.S. and Mexican grant programs are an essential complement to the success of our border environmental efforts," Bentsen said.
"NADBank's job is to deliver financing at a lower cost and with longer maturities than would otherwise be available. To do this, it must maintain high credit standards to earn the AAA rating that will make this possible," he said.
The bank is expected to help guarantee projects that do not qualify for traditional financing.