IFC Invests in Sabesp to Improve Access to Water and Sanitation Services in Brazil

São Paulo, Brazil, November 19, 2024-A new investment by IFC aims to improve water quality and expand access to services in low-income communities, while also addressing biodiversity loss and promoting climate mitigation in the State of São Paulo, Brazil.

IFC is providing a sustainability-linked loan (SLL) of up to BRL 1,060 billion to Sabesp to support the implementation of the company's Integra Tietê initiative. This initiative focuses on enhancing water and sanitation infrastructure along the Tietê River. The SLL includes price incentives tied to increasing the percentage of households connected to sewage connection and treatment.

IFC's investment will help Sabesp finance payments under three performance-based contracts related to the initiative in Guarulhos and Perus, targeting low-income communities in the state. As a result, IFC's loan is expected to impact the lives of more than 360,000 residents.

This investment will also contribute to climate mitigation and adaptation efforts in Brazil by improving optimizing wastewater collection and treatment facilities, resulting in an annual reduction of approximately 4,940 tons of carbon dioxide (CO2) equivalent. Additionally, the Integra Tietê sewage collection network will channel untreated wastewater to treatment plants, thereby reducing overall pollution - a major factor contributing to biodiversity loss.

"IFC's investment in Sabesp builds on and reinforces our programmatic approach to the water and sanitation sector in Brazil, which aims at driving and scaling private sector participation and mobilization," said Manuel Reyes-Retana, Regional Director for South America at IFC. "We are excited to support this initiative from a key partner that focuses on increasing the reliability of water supply and expanding sanitation services for lower-income communities in the State of São Paulo. This investment will not only enhance water quality and sewage services, but also contribute to climate mitigation and biodiversity preservation."

Launched in 2023, Integra Tietê brings together the government, private sector, and civil society to improve the cleanliness of the largest river in the state. The program aims to increase sewage treatment serving 3.8 million people by 2029 in the Metropolitan Region of São Paulo, while significantly improving and preserving the water quality in the Tietê River.

"The Integra Tietê program is one of Sabesp's most significant initiatives aimed at achieving our universalization goals. This marks the first IFC financing specifically dedicated to this project, underscoring our commitment to sustainable development and enhancing the quality of life for the community," says Daniel Szlak, CFO of Sabesp.

IFC's investment in Sabesp aligns with the organization's strategic goal to enhance access to water and sanitation, as outlined in the recently approved World Bank Group's multi-year plan. This is IFC's third investment in Sabesp, a partner under the Utilities for Climate (U4C) initiative since 2022 and its sixth investment in Brazil's water and sanitation infrastructure sector.

About Sabesp

Founded on November 1, 1973, Sabesp is responsible for the supply of water, as well as the collection and treatment of sewage, in 375 municipalities in the state of São Paulo. It is one of the largest sanitation companies in the world in terms of revenue and population served, with approximately 28 million customers receiving water services and 24.7 million receiving sewage services. Sabesp's mission is to provide sanitation services that contribute to the improvement of quality of life and the environment. Its vision is to be a global reference in the provision of sanitation services in a sustainable, competitive, and innovative manner, with a focus on the customer.