MCALLEN, Texas - State Sen. Juan Hinojosa says the Texas Water Development Board has agreed to set aside $100 million out of a $1 billion-plus water conservation fund to line irrigation canals in the Rio Grande Valley.
House Bill 500, passed during the 89th legislative session, appropriated $1.038 billion in funds for water supply and infrastructure projects to the Texas Water Development Board.
Hinojosa said the $100 million set aside for the Valley will be linked to projects approved by the North American Development Bank (NADBank), which currently has an open “Call for Projects” to support urgent water conservation investments in the Valley.
NADBank has launched a Water Resiliency Fund to support urgent water conservation investments in the Valley, with an initial funding allocation of up to $300 million in low interest rate loans and up to $100 million in concessional financing from retained earnings over the next five years.
Hinojosa announced the funding news in a letter sent to Valley water district leaders last month. Here is the letter:
December 19, 2025
Dear Rio Grande Valley Water District Leaders,
I write to share important developments regarding a potential historic funding opportunity to modernize canal infrastructure in the Rio Grande Valley.
Our region continues to face water challenges and all strategies to conserve and manage water must be considered.
Many of you have met with me, members of our legislative delegation, state leaders and state agencies. We are listening and taking action.
Recently, the Texas Water Development Board conducted a work session to discuss plans for distributing the $1.038 billion appropriated in HB 500 during the 89th Regular Session. The discussion included a staff recommendation to allocate $100 million of those funds for canal lining projects in the Rio Grande Valley. This commitment has the potential to benefit all communities in our region.
According to reports provided to my office, there are nearly 3,500 miles of irrigation canals in the Rio Grande Valley. Modernizing these canals through lining will reduce seepage evaporation and operational losses. It is estimated that these upgrades could save 900,000 acre-feet of water annually, resulting in approximately $270 million in annual savings for the agricultural and municipal sectors.
The discussion at the Texas Water Development Board indicated that these funds may be linked to projects approved by the North American Development Bank (NADBank), which currently has an open “Call for Projects” to support urgent water conservation investments in the Rio Grande Valley. There are over $300 million available in this Call for Projects, and NADBank's deadline for submitting proposals is January 8th, 2026.
This may be our only opportunity to access this level of funding for canal modernization. I strongly encourage all entities in the Rio Grande Valley with canal systems to work together and apply for these funds.
Additionally, the $100 million recommendation from the Texas Water Development Board could change. Their decision will be based on the public comments the agency receives on their proposal to distribute the grant funds the Legislature provided.
It will be very important that all of you submit public comment in support of the importance of the lining of the canals in the Rio Grande Valley, once the grant guidance is released on January 5th, 2026. The final date for public comments will be February 4th, 2026.
Thank you for your attention to this important matter. Please do not hesitate to contact me if you have any questions or need additional information.
Sincerely,
Juan ‘Chuy’ Hinojosa
State Senator District 20
Editor's Note: Hinojosa’s staff tell the Rio Grande Guardian that since the letter was sent out the deadline for applications for the NADBank funds has been extended from Jan. 8 to Feb. 10. The staff also say that the number of miles of irrigation canals in the Valley referenced in the letter may be off. Hinojosa’s office based the 3,500 miles figure on testimony provided during the 89th legislative session. His staff are now investigating this because the figure may included irrigation water pipelines that will not need to be improved.
