certification and financing proposal

Transcription

BOARD DOCUMENT BD 2015-17
CERTIFICATION AND FINANCING PROPOSAL
WASTEWATER TREATMENT INFRASTRUCTURE IN
DELICIAS, CHIHUAHUA
Submitted: August 13, 2015
CERTIFICATION & FINANCING PROPOSAL
DELICIAS, CHIHUAHUA
DELICIAS, CHIHUAHUA
INDEX
EXECUTIVE SUMMARY
2
1. ELIGIBILITY
4
2. CERTIFICATION CRITERIA
2.1
2.2
2.3
Technical Criteria
2.1.1. Project Description
5
2.1.2. Technical Feasibility
9
2.1.3. Land Acquisition and Right-of-Way Requirements
11
2.1.4. Management and Operations
11
Environmental Criteria
2.2.1. Compliance with Applicable Environmental Laws and Regulations
12
2.2.2. Environmental Effects/Impacts
13
Financial Criteria
16
3. PUBLIC ACCESS TO INFORMATION
3.1
Public Consultation
18
3.2
Outreach Activities
18
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DELICIAS, CHIHUAHUA
EXECUTIVE SUMMARY
DELICIAS, CHIHUAHUA
Project:
The project consists of the design, construction and operation of
the North Wastewater Treatment Plant with a total capacity of
370 liters per second (lps) or 8.4 million gallons a day (mgd), along
with the West lift station, a force main and a cogeneration facility,
to serve the city of Delicias, Chihuahua (the “Project”)
Project Objective:
The purpose of the Project is to provide access to sustainable
wastewater treatment services by constructing wastewater
conveyance and treatment infrastructure, thereby reducing the
risks of untreated or inadequately treated wastewater discharges,
and improving the quality of effluent discharged to receiving water
bodies. The cogeneration facility will also help reduce demand on
electricity generated from fossil-fuel sources, thus contributing to
the reduction of greenhouse gas emissions.
Expected Project
Outcomes:
The Project is expected to generate environmental and human
health benefits related to the following Project outcomes:
a) Provide 370 lps (8.4 mgd) of wastewater treatment capacity.
b) Eliminate 320 lps (7.3 mgd) of untreated or inadequately
treated wastewater discharges.1
c) Install 763 kW of renewable energy generation capacity.
d) Displace approximately 1,461 metric tons/year of carbon
dioxide equivalent (CO2e), 0.16 metric tons/year of sulfur
dioxide, and 2.68 metric tons/year of nitrogen oxides. 2
Population Benefited:
130,962 residents of Delicias, Chihuahua3
Sponsor:
Tratadora de Aguas de Delicias, S.A. de C.V. (TAD), a specialpurpose company created by the consortium awarded the buildoperate-transfer contract to carry out the Project (the “BOT
Contract”) by the state water agency, Junta Central de Agua y
Saneamiento de Chihuahua (JCAS), and the local water utility,
1
Discharge is calculated as 80% of the drinking water delivered (400 lps) based on a production volume of 632.02 lps
less physical losses (36.7%).
2
The carbon dioxide equivalent for a gas is derived by multiplying the tons of a certain greenhouse gas, such as
methane, by the associated global warming potential.
3
Source: CONAPO Projections for 2015.
2
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DELICIAS, CHIHUAHUA
Junta Municipal de Agua y Saneamiento de Delicias (JMAS).
Borrower:
TAD.
Project Cost:
$257.6 million pesos (US$17.2 million).4
NADB Loan Amount:
Up to $80.0 million pesos (US$5.3 million).
Uses & Sources:
Uses
Construction and supervision
Value-added taxes ( VAT)
Indirect costs*
Other costs**
TOTAL
Sources
NADB loan
JMAS/JCAS funds
Federal funds (FONADIN)
Equity
TOTAL
(Millions of pesos)
Amount
$205.28
33.90
6.62
11.82
$257.62
Amount
$80.00
35.09
69.17
73.36
$257.62
%
79.68
13.16
2.57
4.59
100.0
%
31.05
13.62
26.85
28.48
100.0
* Commissions, insurance, bonds and letter of credit fees.
** Bank commissions and other costs during construction.
4
Unless otherwise noted, all U.S. dollar figures are quoted at an exchange rate of $15.00 pesos per dollar.
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DELICIAS, CHIHUAHUA
1.
ELIGIBILITY
Project Type
The Project falls within the eligible sector of wastewater treatment.
Project Location
The Project is located in the municipalities of Delicias and Rosales, Chihuahua, approximately
115 miles southeast of the U.S.‐Mexico border. The Project is in the border region defined as
within 300 kilometers of the U.S.-Mexico international border.
Project Sponsor and Legal Authority
The private‐sector project sponsor is Tratadora de Aguas de Delicias, S.A. de C.V. (“TAD” or the
“Sponsor”). In 2008, the Chihuahua state water agency, Junta Central de Agua y Saneamiento de
Chihuahua (JCAS) and the Delicias water utility, Junta Municipal de Agua y Saneamiento de
Delicias (JMAS), conducted a competitive bid process in accordance with the Federal Public
Procurement, Leasing and Services Law, whereby they awarded the consortium formed by
Grupo AMDS, S.A. de C.V. and ICOEQUIPOS, S.A. de C.V., a build-operate-transfer contract for
the implementation of two wastewater treatment plants, the North and West plants, in Delicias,
Chihuahua (the “BOT Contract”). The consortium created TAD, a special-purpose company, to
execute the BOT Contract and carry out the Project. In September 2014, TAD and JCAS/JMAS
reached an agreement to modify the original project. The legal representative of TAD is
Francisco Ayala Michel.
BOARD DOCUMENT BD 2015-##
DELICIAS, CHIHUAHUA
2.
CERTIFICATION CRITERIA
2.1 TECHNICAL CRITERIA
2.1.1. Project Description
Geographic Location
Most of the Project components will be located within the municipality of Delicias in the state of
Chihuahua. The North Wastewater Treatment Plant (North WWTP) and conveyance
infrastructure will be constructed in Delicias, Chihuahua, and a lift station with pretreatment
facilities (the “West Lift Station”) will be located in the adjacent municipality of Rosales,
Chihuahua.5 Figure 1, below, shows the approximate geographical location of both
municipalities.
Figure 1
PROJECT LOCATION MAP
5
In accordance with the agreement related to the new Project scope, the West Lift Station will be constructed with
pretreatment facilities, and the wastewater flows will be conveyed to the North WWTP for treatment.
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DELICIAS, CHIHUAHUA
Community Profile
According to the 2010 population census conducted by the Mexican national institute for
statistics, INEGI, the state of Chihuahua has a population of 3.41 million residents and
approximately 4% of the state population (139,000) lives in the municipality of Delicias.
According to INEGI data, the city of Delicias is home to 85% of the population of the municipality
(approximately 118,071 residents). Likewise, INEGI statistics show that the growth rate for
Delicias was 1.0% between 1995 and 2000, and 1.6% between 2000 and 2010. The Mexican
national population council, CONAPO, reported that the city of Delicias will continue to grow at
an average rate of 1.33 % for the next five years and estimates that the population will be
almost 131,000 in 2015.
According to the latest Mexican economic census for the municipality of Delicias, manufacturing
generates 52.0% of the gross domestic product (GDP) and employs 32.2% of the working
population, while commerce represents the second largest sector, generating 19.9% of GDP and
employing 32.0% of the work force, and construction services account for 9.0% of the economy
and 5.5% of total employment. Overall, Delicias represents 3.4% of the state GDP.
Table 1 summarizes the status of public services and infrastructure in the city of Delicias in 2014.
Table 1
PUBLIC SERVICES AND INFRASTRUCTURE
Water System*
Coverage
100%
Supply source
24 wells
Number of connections
53,758
Wastewater Collection
Coverage
100%
Number of connections:
53,745
Wastewater Treatment
Coverage
0%
Treatment facilities
None
Solid Waste
Collection coverage
Information not available
Final disposal
Landfill
Street Paving**
Coverage
43%
* Source: Information provided by JCAS.
** Calculation based on data from the Assessment for Basic Infrastructure for the State of
Chihuahua, developed by BECC in 2010.
Local Water and Wastewater System
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Drinking water distribution and wastewater collection services are provided by JMAS. Water is
supplied by 24 groundwater wells, disinfected, and then sent directly to the distribution system,
which includes 15 regulating tanks. The water system provides service to approximately 53,758
hookups, of which 93% or 50,117 are residential.
The wastewater collection system provides service to approximately 53,745 connections, of
which 93% or 50,107 are residential. Currently, wastewater is collected and conveyed through
seven collectors that discharge untreated flows directly into a tributary of the San Pedro River,
which is located north of the city of Delicias and eventually flows into the Conchos River. The
water from the San Pedro River and its tributary is used for agricultural purposes.
The direct discharge and filtration of wastewater into existing surface and groundwater
resources represent an environmental and human health risk. Since 2008, JCAS has been paying
fees to the Mexican national water commission, CONAGUA, for non‐compliant wastewater
discharged at various locations in Delicias. For these reasons, the Project is a top priority for
JCAS and JMAS.
Furthermore, one of the long-term goals in Mexico is to treat all wastewater in the country. The
goal was presented in the 2030 Water Agenda. According to this plan, by 2030, all wastewater
collected will be treated.6 The proposed Project directly supports the achievement of this goal,
as well as compliance with current wastewater regulations.
Project Scope and Design
The purpose of the Project is to provide sustainable wastewater treatment services and improve
the water quality of local water bodies by eliminating the discharge of untreated or
inadequately treated wastewater.
The Project consists of the design, construction and operation of the North WWTP with a total
capacity of 370 lps (8.4 mgd), the West Lift Station, a force main and a cogeneration facility. The
West Lift Station will have a capacity of 120 lps (2.7 mgd) and will pretreat wastewater from the
southwest area of the city, prior to conveying the flows 2.8 km (1.74 miles) through the force
main to the North WWTP for treatment. The North WWTP will have a capacity of 370 lps (8.4
mgd) and will also include sludge treatment and a 763-kW cogeneration facility.
The Project will have a combination of primary and secondary treatment processes in order to
comply with quality requirements in a cost-effective manner. The West Lift Station includes a
pretreatment process with screening and aeration prior to conveying the flows to the North
WWTP for additional treatment. The flows from the West Lift Station will be mixed with the
other inflows to the North WWTP before entering the primary treatment process, which
includes a centrifuge grit chamber, aeration and sedimentation. After primary treatment, flows
will receive secondary treatment through an activated sludge process. After secondary
treatment, the flows will be disinfected before discharge. All effluent will comply with Mexican
standard NOM-001-SEMARNAT-1996, which establishes the maximum permissible levels of
6
Source: CONAGUA
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DELICIAS, CHIHUAHUA
contaminants for wastewater discharges into national waters and territories. Any effluent that is
expected to be used in public areas will comply with Mexican standard NOM-003-SEMARNAT1997, which regulates wastewater discharges for reuse with potential for human contact.
Primary and secondary sludge generated in the treatment process at the North WWTP will be
combined in an aerated homogenization tank prior to anaerobic digestion. After the digestion
process, sludge will be held in a temporary storage tank, with a three-day capacity, before
passing through one of the two belt filter presses for sludge thickening. Waste sludge will be
treated in accordance with Mexican standard NOM-004-SEMARNAT-2002 and will be disposed
of, along with other debris resulting from the pretreatment process at both the North WWTP
and West Lift Station, in the Delicias municipal landfill, located about 16 miles from the North
plant.
The North WWTP also includes a 763 kW-cogeneration facility that will use the biogas generated
during the anaerobic sludge digestion process. The biogas will be captured and stored for
treatment (removal of hydrogen sulfide (H2S), siloxanes, and particles; cooling; and drying) and
used in a cogeneration process to generate thermal energy for the digesters, as well as part of
the electricity required to operate the North WWTP. The cogeneration facility is part of the
modified scope of the Project and has helped the Sponsor reduce operational costs and improve
the financial feasibility of the Project.
The effluent from the North WWTP will be discharged just north of the plant. The approximate
location of the point of discharge is shown in Figure 2.
Figure 2
EFFLUENT DISCHARGE POINT
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DELICIAS, CHIHUAHUA
The BOT Contract covers the construction, start-up, operation and maintenance of all Project
infrastructure, and will be carried out in two phases: 1) a 16-month construction phase, which
includes a testing period; and 2) an 18-year operation phase, which will begin upon completion
of the construction phase. The operation phase consists of all operation and maintenance
activities, including the removal and disposal of all solid waste and sludge generated by all the
Project facilities.
Table 2 presents the status of key tasks for the implementation of the Project.
Table 2
PROJECT MILESTONES
Key Milestones
Land use change authorization from the Municipality
Preventive Report Resolution from SEMARNAT
Updated discharge permit from CONAGUA
Operation start-up
Status
Completed September 2006
Received May 2007
Prior to operation
2016
2.1.2. Technical Feasibility
During the bidding process, the Sponsor presented a design proposal based on the technical and
effluent quality requirements established by JCAS and JMAS in the procurement documents. In
September 2014, TAD and JCAS/JMAS reached an agreement to modify the original proposal in
order to have a cost-effective Project, while complying with the regulations for discharges to
surface water bodies and for potential reuse. The anticipated influent and effluent
characteristics for the North plant’s design are provided in Table 3.
Table 3
ANTICIPATED INFLUENT AND DISCHARGE CHARACTERISTICS*
Parameter
Average flow (mgd)
Biochemical oxygen demand (mg/L)
Total suspended solids (mg/L)
Total nitrogen (mg/L)
E. Coli CFU/100 mL
Influent
8.4 mgd (370 lps)
350 mg/L
300 mg/L
50 mg/L
Design Effluent
8.4 mgd (370 lps)
30 mg/L
30 mg/L
40 mg/L
1000 MPN/100 mL
* Influent characteristics as defined in the final design documents.
CFU = Colony forming units; MPN = most probable number
The North WWTP has been designed to meet the discharge requirements established under
Mexican standard NOM-003-SEMARNAT-1997. Its design is based on the organic and hydraulic
loading of the anticipated influent and the target effluent quality to ensure that permit
requirements will be met for reuse. Considerations for future expansion have also been
incorporated into the designs, which will allow for the phased expansion of the plants to meet
increased demand.
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DELICIAS, CHIHUAHUA
Selected Technology
The following factors were taken into consideration in the selection process:

Compliance with the applicable treatment regulations for wastewater reuse.

Treatment capacity sufficient to address the city’s existing needs of 320 lps (7.3 mgd).

Capital cost, to include a combination of public funds, private equity, and long-term
financing.

Operations and maintenance (O&M) costs to ensure the utility’s financial viability and
sustainability.
Influent at the West Lift Station will pass through automated bar screens. The raw wastewater
will be pumped to the automated pretreatment module, which includes pre-aeration and
primary sedimentation for homogenization. Up to 120 lps (2.7 mgd) of pretreated wastewater
will then be pumped to the North WWTP for final treatment.
The treatment will continue at the North WWTP with two biological reactors equipped with
aerators and two secondary clarifiers. Treated wastewater will be disinfected using ultraviolet
technology. The North plant will be designed to treat excess flows due to nonstandard events in
order to avoid discharge of untreated wastewater. Both facilities will also include bypass
systems for extraordinary events to avoid damage to equipment, as well as a guard booth,
perimeter fence, and green areas in accordance with plans and specifications.
The main components of the West Lift Station are

Influent canal with automated bar screens for removal of debris.

Pretreatment module with aeration system to homogenize wastewater flows.

Bypass systems for extraordinary events.

Additional works, including guard booth, perimeter fence and green areas in accordance
with plans and specifications.

Pump equipment to send up to 120 lps (2.7 mgd) of homogenized wastewater flows to
the North WWTP for additional treatment.

Force main to convey flows from the lift station to the North WWTP.
The main components of the North WWTP are:

Wastewater treatment:
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o
Influent canal with automated bar screens for removal of debris with a capacity of
up to 632 lps (14.4 mgd).
o
Lift station to pump the raw water to the treatment process.
o
Automated pretreatment module with the capacity to treat up to 370 lps (8.4
mgd).
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DELICIAS, CHIHUAHUA


o
Pre-aeration and primary sedimentation in two independent modules.
o
Biological treatment of the influent in two activated sludge reactors, each with a
capacity of 2,800 m3 (740,000 gallons), equipped with aerators and two secondary
clarifiers with a diameter of 30-meter (100-ft.).
o
Disinfection using automated ultraviolet lamps to ensure the bacteriological
quality of the effluent and comply with the required disinfection parameters.
o
Bypass systems for extraordinary events.
o
Peripheral equipment in accordance with the specifications and plans.
Sludge digestion:
o
Aerated homogenization and conditioning of the sludge in a 1,200 m3 (317,000gallon) tank.
o
Anaerobic digestion of sludge in a 3,600 m3 (951,000-gallon) tank, including sludge
mixing and heating, as well as biogas storage.
o
Temporary sludge storage in a 600 m3 (158,500-gallon) tank, with storage capacity
for three days.
o
Two belt filter presses for sludge thickening, each 2.1 m (7 ft.) wide, with one in
operation and the other for backup.
Cogeneration:
o
Capture of biogas produced in the digestion process.
o
Biogas treatment, including removal of hydrogen sulfide, siloxanes and particles, as
well as cooling and drying.
o
Cogeneration of thermal energy for use in the digestion process, with an installed
generation capacity of 763 kW, to produce electricity for use in plant operations.
2.1.3. Land Acquisition and Right-of-way Requirements
The Project includes two main components that will be constructed at different sites owned by
JMAS. The ownership documentation has been provided for each site. The force main from the
West Lift Station to the North WWTP will be located along rights-of-way of existing wastewater
collectors. JCAS has indicated that no other land acquisition is necessary for the Project. The
Municipality of Delicias has already authorized the land use change for both Project sites.
2.1.4. Management and Operations
The Sponsor, TAD, is backed by Grupo AMDS, an internationally recognized Mexican company
that operates treatment plants in nine countries: Mexico, United States, Canada, Dominican
Republic, Panama, Venezuela, Colombia, Chile and Uruguay. The company has extensive
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DELICIAS, CHIHUAHUA
knowledge of the international market and works with various suppliers through strategic
alliances to provide the best technology, equipment and engineering services.
The Sponsor has signed an agreement to abide by the obligation to submit an O&M manual
before operational testing begins. Oversight for operation of the treatment facilities will be
provided by JCAS, which has similar facilities operating throughout the state.
CONAGUA issued water rights to JCAS for the operation of the water well supply system, which
also includes discharge requirements for resulting wastewater flows. The water supply permit
has been extended for current operations and will need to be updated once the designs of the
wastewater treatment facilities are complete in order to incorporate the specific discharge
location and quality requirements.
Additionally, prior to operation of the cogeneration component at the North WWTP, the Project
Sponsor will need to consult with SEMARNAT to determine whether an environmental license is
necessary for the operation of the energy generation facility.
2.2 ENVIRONMENTAL CRITERIA
2.2.1. Compliance with Applicable Environmental Laws and Regulations
Applicable Laws and Regulations
Based on the Preventive Report Resolution issued by the Mexican Ministry of Environment and
Natural Resources (SEMARNAT), the laws and regulations applicable to the Project are:

General Law of Ecological Balance and Environmental Protection (LGEEPA), which
establishes the environmental regulatory framework, expands the strategic vision and
conveys specific powers and duties to the states and municipalities, so that
environmental problems can be addressed directly.

National Water Law, which establishes the regulations for water use, distribution and
control.

General Law for Comprehensive Waste Prevention and Management, which identifies
the criteria that should be considered by various levels of government in the generation
and comprehensive management of solid waste, in order to prevent and control
environmental pollution and ensure the protection of human health.

Chihuahua State Environmental Protection Law, which establishes the framework for
environmental protection in the state.

NOM-001-SEMARNAT-1996, which establishes the maximum permissible levels of
contaminants for wastewater discharges into national waters and territories.

contaminants for wastewater discharges into urban or municipal wastewater collection
systems.
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DELICIAS, CHIHUAHUA

contaminants for reclaimed water use in public services.

NOM-004-SEMARNAT-2002, which establishes the norms for managing, treating and
disposing of sludge generated in treatment plants.
Environmental standards associated with the construction of the Project are also referenced in
the SEMARNAT resolution. In general, the construction of a cogeneration plant is subject to
federal environmental clearance in accordance with Mexico’s General Law of Ecological Balance
and Environmental Protection. However, under this law, cogeneration facilities of less than 3.0
MW do not require federal environmental authorization.
Environmental Studies and Compliance Activities
In accordance with the LGEEPA, JCAS submitted a Preventive Report to SEMARNAT outlining the
possible environmental impacts resulting from the implementation of the Project. SEMARNAT
issued a Resolution to the Preventive Report in 2007, in which it approved the construction and
treatment activities of the North WWTP for a period of 20 years and the West Lift Station for a
period of 25 years. According to the resolution, none of the possible effects were found to have
a significant impact. The sites for both facilities have been previously impacted and are currently
used for agriculture, so there will be no adverse impacts to the biodiversity of the area.
Nevertheless, JCAS proposed mitigation measures in the Preventive Report to reduce the
impacts of each environmental component of the Project.
Federal laws require that wastewater be treated in accordance with current standards.
Currently, wastewater is collected and discharged without treatment. In order to comply with
federal law regarding national waters, JCAS continually renews its permits for rights to discharge
untreated wastewater to receiving water bodies. The original wastewater discharge permit was
issued by CONAGUA in November 1994 for ten years and expired in 2004. The permit will be
updated with CONAGUA for the discharge of treated wastewater, using the North WWTP as the
point of discharge.
Pending Environmental Tasks and Authorizations
The only pending environmental authorization is the updated discharge permit from CONAGUA.
Compliance Documentation
The following authorizations have been obtained for the Project:

Preventive Report Resolution 08CI2007HD010 (West Lift Station)

Preventive Report Resolution 08CI2007HD012 (North WWTP)
2.2.2. Environmental Effects/Impacts
Untreated wastewater discharges in the Project area are a potential source of disease-carrying
organisms that contaminate the soil, surface water and groundwater. The inappropriate disposal
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of untreated wastewater in the area results in contaminated flows to the San Pedro River, which
are intercepted during dry weather and conveyed to local agriculture land to irrigate crops.
Mechanized wastewater treatment processes consume large amounts of energy. The Project is
expected to offset the demand on traditional energy sources by using the biogas generated on
site. The Project provides an opportunity to displace greenhouse gases (GHG) and other
pollutants produced by traditional hydrocarbon-based energy generation, while providing a safe
and reliable energy alternative for the new wastewater treatment facilities.
The anticipated environmental benefits from installing 370 lps (8.4 mgd) of wastewater
treatment capacity and 763 kW of renewable energy generation capacity are:

Eliminate 320 lps (7.3 mgd) of untreated or inadequately treated wastewater
discharges.7

An expected displacement of approximately 1,461 metric tons/year of carbon dioxide
equivalent (CO2e), 0.16 metric ton/year of sulfur dioxide and 2.68 metric tons/year of
nitrogen oxides. 8
Existing Conditions and Project Impact – Environment
The proposed Project will eliminate untreated wastewater discharges, contributing to improved
environmental conditions and reducing the potential contamination of surface and groundwater
in the surrounding area. The discharge of untreated and/or inadequately treated wastewater
poses a risk to the natural environment:9
 Increased levels of organic matter in the receiving water body decreases dissolved oxygen
(DO) in the aqueous environment as the organic matter breaks down. Reduced DO levels
are detrimental to the health of aquatic plants and animals that need DO to live;
 Microbial pathogens can have negative impacts on public health and the health of the
ecosystem;
 Sedimentation from sewage can degrade native vegetation and soil; and
 Sewage increases turbidity, cutting off light to plants and animals.
Although not all of the treated effluent will be reused, the new treatment facilities are designed
to treat all wastewater flows to comply with Mexican standard NOM-003-SEMARNAT-1997,
which establishes the maximum permissible levels of contaminants for non-potable reclaimed
water use and is more stringent than the quality requirements for discharge into a national
water body.
Overall, the Project is expected to have a positive impact on the environment.
7
Discharge is calculated as 80% of the drinking water delivered (400 lps) based on a production volume of 632.02 lps
less physical losses (36.7%).
8
The carbon dioxide equivalent for a gas is derived by multiplying the tons of a certain greenhouse gas, such as
methane, by the associated global warming potential.
9
Source: http://www.water-matters.org/node/104
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DELICIAS, CHIHUAHUA
Mitigation of Risks
Although implementation of the Project will have no significant adverse impacts on the
environment, mitigation measures were established to address temporary, minor impacts
during construction. Potential impacts during construction include fugitive dust and other
emissions from vehicle and equipment exhaust affecting the air shed, as well as increased noise
levels near the work areas. The proposed mitigation measures include the following:

Application of treated wastewater to reduce fugitive dust emissions.

Vehicle maintenance and tune-ups to reduce emissions.

Placement of warning signs to prevent potentially hazardous situations.

Separate management of urban and special solid waste and disposal in accordance with
existing Mexican standards and state regulations.
In summary, the mitigation measures include best management practices and compliance with
local ordinances to reduce the temporary impacts of construction activities.
Natural Resource Conservation
The Project contributes to natural resource conservation by reducing environmental
deterioration and the risks of groundwater and surface water contamination. The reuse of the
reclaimed wastewater for public areas will reduce the demand on potable water for irrigation
purposes. Additionally, using byproducts of the treatment process to generate energy on site
will reduce demand on traditional energy sources, as well as the volume of solid waste for
disposal.
No Action Alternative
The no‐action alternative was not considered viable since existing wastewater discharges are
untreated and do not comply with environmental regulations. The lack of wastewater treatment
jeopardizes the health of residents in Delicias and surrounding areas due to their possible
exposure to raw wastewater and the associated risk of disease.
Existing Conditions and Project Impact – Health
Waterborne diseases are caused by pathogenic microorganisms that are transmitted as a result
of inadequate wastewater disposal practices and unsafe water supplies. An individual can
become ill after drinking water that has been contaminated with these organisms, eating
uncooked foods that have been in contact with contaminated water or through poor hygiene
habits that contribute to the dissemination of diseases by direct or indirect human contact.
According to the World Health Organization Water, Sanitation and Hygiene Links to Health
FACTS AND FIGURES – November 2004 edition, sanitation projects can have the following
benefits to human health:

Improved sanitation reduces diarrhea morbidity by 32%.

Access to safe water and sanitation facilities and better hygiene practices can reduce
morbidity from ascariasis by 29%.
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The construction of the wastewater conveyance and treatment infrastructure in Delicias will
reduce health risks that may be associated with the lack of wastewater treatment. The proposed
Project will allow JMAS to treat 100% of the wastewater collected in the city of Delicias in
compliance with existing federal and state laws.
Transboundary Effects
The effluent discharges are located over 100 miles from the Rio Grande and the international
border; therefore, no transboundary impacts are anticipated.
Other Local Benefits
The Project is expected to generate both permanent and temporary jobs in the border region as
a result of the construction and operation of the facilities. Employment of personnel for
construction activities would provide a temporary beneficial impact on local businesses and the
regional economy through increased expenditure of wages for goods and services. Finally, the
Project will also play an important role in making Delicias a more resilient city by mitigating risks
and preparing for the future.10
2.3. FINANCIAL CRITERIA
The total cost of the Project is estimated at $257.62 million pesos, which includes costs related
to design, construction and equipment, supervision, financing costs and value-added taxes
(VAT). TAD has requested a NADB loan for up to $80.00 million pesos to complete the financing
of the Project. Table 4 presents a breakdown of total Project costs, as well as the sources of
funds.
10
Resilience is defined by the Rockefeller Foundation as, "the capacity of individuals, communities, institutions,
businesses and systems within a city to survive, adapt, and grow no matter what kinds of chronic stresses and acute
shocks they experience."
AUGUST 13, 2015
16
DELICIAS, CHIHUAHUA
Table 4
PROJECT COST AND SOURCES OF FUNDS
(Millions of pesos)
Uses
Construction and supervision
Value-added taxes (VAT)
Indirect costs*
Other costs**
Amount
$205.28
33.90
6.62
11.82
%
79.68
13.16
2.57
4.59
TOTAL
$257.62
100.00
Sources
Amount
%
NADB loan
JMAS/JCAS
Federal funds (FONADIN)
Equity
TOTAL
$80.00
35.09
69.17
73.36
31.05
13.62
26.85
28.48
$257.62
100.00
* Commissions, insurance, bonds and letter of credit fees.
**Bank commissions and other costs during construction.
The proposed payment mechanism is consistent with financial structures for BOT contracts
implemented in Mexico. Once construction is completed and the project becomes operational,
JMAS will deposit a portion of its revenue into an irrevocable trust (the “Trust”), which will serve
as the source of payment for TAD’s services. The amount deposited will cover the debt service,
the company’s return on investment, fixed operation and maintenance costs, and variable
operation and maintenance costs. TAD will bill JMAS on a monthly basis.
JMAS’ obligations under the BOT Contract will be guaranteed by a revolving, contingent and
irrevocable line of credit, at all times equal to three (3) months of TAD’s billing. The State of
Chihuahua and JMAS will be jointly liable for all obligations associated with the line of credit.
Additionally, the line of credit will be backed by the federal tax revenue (“participaciones”) of
the State of Chihuahua.
NADB performed a financial and risk analysis of JMAS as the source of payment and of the State
of Chihuahua as the guarantor. The cash flow projections indicate JMAS and the State of
Chihuahua can undertake the financial obligations under the BOT Contract. However, the
analysis indicates that JMAS needs to improve its operating results by either increasing its
service revenue or reducing operating costs or both; otherwise its capacity to fund its capital
investment plan may be jeopardized, and the contingent line of credit may have to be utilized.
Considering the Project’s characteristics and based on the financial and risk analysis, the
proposed Project is financially feasible and presents an acceptable level of risk. Therefore, NADB
proposes providing a market-rate loan of up to $80.0 million pesos to Tratadora de Aguas de
Delicias, S.A. de C.V.
17
AUGUST 13, 2015
DELICIAS, CHIHUAHUA
3.
PUBLIC ACCESS TO INFORMATION
3.1. PUBLIC CONSULTATION
BECC released the draft project certification and financing proposal for a 30-day public comment
period beginning May 8, 2015. The following documents were made available upon request:

Preventive Report Resolution 08CI2007HD010 (West Lift Station)

Preventive Report Resolution 08CI2007HD012 (North WWTP)

Land use change authorization
The 30-day public comment period ended on June 7, 2015, with no comments received.
3.2. OUTREACH ACTIVITIES
In addition to the public consultation required for BECC certification, BECC conducted a media
search to identify public opinion concerning the wastewater treatment project in Delicias. Links
to news articles related to the Project are provided below:

http://eldiariodechihuahua.mx/El_Estado/2014-12-02/Presentan-la-cronolog%C3%ADade-la-construcci%C3%B3n-de-las-plantastratadoras/94d4d0645daab531f2c9c62c40b2e105 (Published December 2, 2014,
provides an overview of the anticipated construction schedule for the Project.)

http://elpionero.com.mx/notas.pl?n=56616&s=c (Published September 29, 2013,
provides an anticipated construction start date pending local legislative approval
following project modifications to make it financially feasible.)
The Project was awarded to the Sponsor through a competitive bidding process in August 2008,
and has been in development for more than six years. The Sponsor has been working with the
stakeholders to develop a cost-effective option that addresses the problem of untreated
wastewater discharges, and periodic updates have been provided to the public. Since the
Project will solve the problem of untreated wastewater discharges, no community concerns
about the Project have been identified.
No opposition to the Project was detected in available media coverage or through the Project
outreach activities. The Project Sponsor has met all public consultation requirements in order to
comply with applicable environmental clearance and funding program processes.
AUGUST 13, 2015
18

certification and financing proposal

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