December 9, 2013 by  
Filed under Green Energy News

Renewable-energy portfolio

The North American Development Banks says it has participated in 19 renewable energy projects, with $860 million in financing.

Peak electrical generation capacity should equal 873 megawatts, similar in scope to a major natural gas power plant.

Renewable energy prospectors plying the vast deserts and windswept plains along the U.S.-Mexico border have found an influential financial ally with a top credit rating.

The North American Development Bank, founded nearly 20 years ago under the North American Free Trade Agreement with an infusion of capital from the U.S. and Mexican governments, has traditionally focused on drinking water and sewage systems.

But renewable energy projects, like solar and wind farms, also fit under the bank’s broad umbrella for infrastructure projects that improve human health, promote sustainable development and enhance the quality of life in the border region.

Last year, nearly three-quarters of the bank’s new financing was devoted to renewable energy development.

The transition to clean-energy lending has taken place in just over three years at the San Antonio-based bank, building on strong support by administrations in Mexico and the United States for expanding alternatives to fossil-fuel-based power. The bank’s board includes officials from the U.S. Environmental Protection Agency and its Mexican counterpart, best known as SEMARNAT.

“The border happens to have good conditions for wind and photovoltaic energy production,” said Gerónimo Gutiérrez, managing director at the bank. “Mexico is very interested in making that push toward renewable energy. The United States is the same.”

The “North American” part of the bank’s name is something of a misnomer: Its lending authority hews to the curves of the 1,951-mile border, extending up to 62 miles north of the border and 186 miles south.

The bank’s $3 billion capitalization is dwarfed by divisions of the anti-poverty World Bank, or the Washington-based Inter-American Development Bank that funds prosperity causes across Latin America and the Caribbean.

The bank fills a significant development niche, however, by luring commercial lenders into long-term commitments, said Jeremy Martin, director of the San Diego-based Institute of the Americas’ Energy Program.

“If not for their participation, commercial banks would either not do it or the terms would be so long that it wouldn’t work,” he said.

Diverse interests

The majority of the bank’s green-energy loans have been awarded to projects on U.S. soil — in Texas, Arizona and California, including several utility-scale solar projects in San Diego County and the neighboring Imperial Valley.

Those efforts have tied the bank to diverse business interests drawn to generous federal and state incentives for renewable energy. Associated investors include major investment banks anchored on Wall Street and in Europe and Asia. Green energy prospectors seeking out loans include California-based renewable concerns like Pattern Energy, energy multinational Chevron, and U.S. utility majors Duke Energy and NRG.

The ultimate guarantor of the loans are utility customers of investor-owned utilities like San Diego Gas Electric and customer-owned electricity retailers like the Imperial Irrigation District.

Gutiérrez, the managing director, said the goal is to attract other funding sources, not squeeze them out.

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