U.S. border solar financier NADB up for $3 billion infusion

The bilateral North American Development Bank (NADB), a staunch financier for solar projects in the U.S. and Mexican states straddling the border, may gain a $3 billion infusion from the U.S. and Mexican governments if U.S. House Resolution 882 comes to pass.

And if the Trump administration is serious about a solar wall between the two countries, the NADB would be the entity to finance it. HR 882, introduced in February by Rep. Henry Cuellar (D-TX) would increase the bank’s capital by $3 billion, with equal shares coming from each government. Apart from the proposed infusion, the bill also would streamline and accelerate the bank’s lending processes.

Among U.S. solar projects recently funded by the program is the 10 MW SEPV Imperial Solar Project in Dixieland, CA, which came on line in December and provides energy to the Imperial Irrigation District under a power purchase agreement (PPA). Solar Electric Solutions, through its wholly-owned subsidiary SEPV Imperial LLC, developed and permitted the 2 MW SEPV Dixieland East solar project and the 3 MW SEPV Dixieland West solar project.

Among the projects under consideration for NADB loans now are three solar projects. U.S. solar developers are able to bid on these projects since the Mexican government opened renewables development to private companies a year ago. These three projects include the 317 megawatt (MW) Puerto Libertad Solar Park in Puerto Libertad, Sonora State, currently the largest solar park planned in Mexico. The 141 MW Santa Maria Solar Park in Galeana, Chihuahua State and the 122 MW Orejana Solar Park in Hermosillo, Sonora State are the other two solar projects under review.

NADB lending in the solar sector could speed up. “Mexico’s new regulatory framework for private sector involvement in energy production presents an opportunity to U.S.developers,” says Carlos Carranza, the director of project development at NADB. “Once private sector developers started bidding on energy projects in Mexico, we began to get more requests for financing,” he adds.

While the NADB attracts private sector lenders interested in the tax credits associated with solar development, it also attracts portfolio investors since the bank loans go out as far as 25 years. The bank is exempt from U.S. taxes since then-President Bill Clinton decreed in a 1994 executive order that the NADB is an international organization under the International Organization Immunities Act, which shields it from paying taxes.