New Mexico officials announced Thursday the state will invest $25.9 million in seven projects designed to turn salty underground water into usable supplies, marking the first major funding under a new program aimed at stretching the state’s limited freshwater resources.
The grants represent the initial phase of a $40 million legislative appropriation for the Strategic Water Supply Program, created this year to develop alternative water sources as climate change strains the arid state’s water supplies. Officials expect to award another $13 million in contracts in the coming months.
The program targets brackish water — naturally salty groundwater unsuitable for drinking without treatment — which could provide critical relief as New Mexico faces a projected shortfall of more than 244 billion gallons over the next 50 years if current trends continue.
“New Mexico doesn’t have to choose between water security and economic growth,” Gov. Michelle Lujan Grisham said in a statement. “By leveraging our state’s brackish water reserves, cutting-edge technology, and the expertise of local governments, we can secure both.”
The grants support projects ranging from basic research to the construction of treatment facilities. The largest award — $11.7 million — goes to the Village of Cuba in Sandoval County for designing what officials called a first-of-its-kind zero-waste desalination facility expected to produce 518,000 gallons of drinkable water daily.
Other recipients include the Alamo Navajo School Board in Socorro County, which received $1.83 million to build a small-scale treatment plant, and New Mexico State University’s Arrowhead Center, which was awarded $3 million to establish a research hub converting waste brine into valuable products.
The Pueblo of Laguna received $6 million for a feasibility study examining its brackish water resources. Additional grants went to the City of Anthony, the University of New Mexico and the New Mexico Institute of Mining and Technology for research and pilot projects.
New Mexico has an estimated 1.3 trillion gallons of brackish water stored underground statewide, according to the Environment Department. While the water cannot be used directly for drinking or some agricultural purposes, treatment facilities can make it suitable for manufacturing, cooling and other industrial uses, preserving freshwater for critical needs.
The competitive grant process drew 13 applications requesting more than $94 million, plus $40 million in private sector proposals. A technical review committee led by the Environment Department and Office of the State Engineer selected the winning projects based on technical merit, environmental compliance and economic development potential.
“The projects selected provide a wide variety of examples of how the Strategic Water Supply Program can help our communities continue to thrive while protecting our precious freshwater resources,” State Engineer Elizabeth Anderson said.
The program stems from House Bill 137, which the Legislature approved and Lujan Grisham signed during the 2025 session.