Strengthening the water infrastructure along the border, an already costly initiative has the potential to become even more expensive.
The North American Development Bank — a chartered financial institution backed by the U.S. and Mexico — warns that efforts to create more sustainable water resources along the border may incur increased costs as higher tariffs remain in effect. The Trump administration’s levies against Mexico, Canada and others have already put several industries critical to South Texas’s growth in flux, from produce growers to commercial real estate.
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San Antonio-based NADBank wants to fund projects on both sides of the border that contribute to water resource management, drinking water treatment, wastewater collection, stormwater management and other facets of the region’s water supply. The bank’s board of directors approved the initiative as part of its strategic plan through 2028, making it 30% of its portfolio. The organization estimates it will loan out $235 million over two years as part of a pilot program. But John Beckham, the bank’s managing director, told the Business Journal those figures could rise.
Like the price spikes seen during the height of the COVID-19 pandemic, Beckham said he expects materials and other aspects of building new water infrastructure to rise. He pointed to several projects the bank was funding at the time that required a boost in capital commitments.
“So as much as tariffs are sustained, we may see that in terms of the project costs," Beckham said in a recent interview. “That’s to be seen. The economists are discussing it. Most economic orthodoxy is that tariffs could be inflationary. I think that is a concern of ours on the horizon that we’re evaluating and how it affects project costs.”
Read more of this story at the San Antonio Business Journal website.
Editor’s note: This story was published through a partnership between KSAT and the San Antonio Business Journal.
