Environmental infrastructure projects can be complex, expensive to develop and difficult to manage. The need to maximize the operating conditions of existing utility systems is critical. However, many public utilities in border towns in both countries, especially in small, low-income communities, have neither the solid institutional structure nor the financial capacity to undertake studies and implement reforms that would enable them to meet community needs adequately. In addition, there is a clear need to improve the credit rating and quality of the projects and their sponsoring agencies in order to restructure municipal financing and channel more private capital to relevant projects. To help address these needs, the NADB has created the Institutional Development Cooperation Program (IDP) as a crucial complement to its loan and guaranty program.
Objective
The objective of the IDP is to provide grant assistance for institutional strengthening tools to assist in achieving effective and efficient operation of utilities, state and local government agencies, and other project sponsors involved in water, wastewater, solid waste management, water conservation, and all other sectors in which NADB operates.
The IDP is designed to complement and work with other development programs, including the Technical Assistance Program of the Border Environment Cooperation Commission (BECC).
Eligibility
IDP grant assistance supports utilities, state and local government agencies, and other sponsors of projects that have been certified by the BECC, or sponsors who are actively developing specific projects for certification by BECC and financing by NADB.
In order to be eligible for IDP grant assistance, at a minimum, a project sponsor must have submitted a Step I to the BECC and be actively working on a Step II for submission to the BECC, for a project located within 100 kilometers
(62 miles)
north of the international border in boundary in the four U.S. states of Texas,
New Mexico, Arizona and California and within 300 kilometers (about 186 miles)
south of the border in the six Mexican states of Tamaulipas, Nuevo Leon,
Coahuila, Chihuahua, Sonora, and Baja California.
Types of Assistance
Assistance will be provided for certain activities that strengthen institutional capacity and create a solid financial foundation for the development of infrastructure projects being certified by the BECC and financed by NADB. These activities are limited to the following:
- Financial Studies. Because of their strong relationship to project sustainability and financial feasibility, focus will be given to financial studies that address user fees and fee structures, and the development of user registries.
- Administrative operational analyses. This area includes management studies, billing and collection studies, operation manuals and procedures, reviews of conservation policies and procedures, audits, evaluations of commercial, administrative and operational performance, and public outreach efforts regarding the benefits of fee for service and other issues of importance to the financial health of a project sponsor.
- Technical operational analyses. This area includes regional planning studies, water loss audits, line surveys, mapping, urban cadastral system studies related to municipal planning reforms, technical diagnostic studies, energy audits, clean energy resource assessments and evaluations, urban public transport execution program plans, urban public transport demand studies, and evaluations of electromechanical equipment, and infiltration and inflow analyses.
- Legal and regulatory analyses. This area includes the review of legal and regulatory frameworks, land use policy studies, and analyses of the privatization process.
- Information and management system studies. Ordinarily, IDP funds will not be used to purchase software and equipment related to an IDP study. However, the Technical Assistance Committee may approve the purchase of such software or equipment when a project sponsor commits and provides 30% of the cost of such software or equipment and the training necessary to utilize it.
General Funding Terms
Generally, the maximum amount of grant assistance that each IDP recipient or study can receive in a given NADB fiscal year is US$250,000.
The study sponsor will be required to provide an appropriate cash contribution toward the cost of an IDP-funded study. In cases involving updates of studies previously funded by the IDP, a contribution of at least 15% of the study’s cost will be required. In addition, regionalization studies will require a cash contribution of at least 25% of the cost of the study from the study sponsors, in order to demonstrate adequate community buy-in.
In the event the project being supported by IDP grant assistance receives financing from NADB, NADB may require reimbursement in whole or in part of such assistance as a project development cost. Such reimbursement may be funded out of loan proceeds.
Operation
Assistance will be subject to the availability of funds. NADB shall determine if a proposed study should be procured directly by NADB or the project sponsor based on the type of study and the capacity of the sponsor. The procurement of any goods and services under the program will be carried out in accordance with NADB procurement policies and procedures, whether procured by NADB or the sponsor.
Upon completion of each study, the project sponsor and NADB will devise an implementation plan addressing the results and recommendations of the study, and will evaluate the consultant’s performance and the study’s effectiveness.
Receiving assistance through the IDP or any other NADB-sponsored assistance program does NOT imply or guarantee NADB project funding.
For more detailed information about this program, see IDP Operating Guidelines (pdf).
Complementary Assistance
In addition to assisting communities reinforce their institutional capacities, the NADB can also help project sponsors with the planning of environmental infrastructure projects through its Project Development Program (PDP). Assistance is available for studies and actions necessary for the proper design and development of infrastructure projects in any of the environmental sectors in which the NADB operates.
