IFC to fund sewerage infrastructure improvements in Brazil

International Finance Corporation (IFC) will provide a $53m loan to Brazilian water and sanitation services provider AEGEA Saneamento to improve sewerage infrastructure services in the country.

The loan will be used for an expansion of AEGEA’s services in low-income regions such as north and north-east Brazil that are lacking sufficient sewerage facilities. About two million people are expected to benefit from the works by 2016.

IFC country manager in Brazil, Loy Pires, said that the investments in water and sanitation services have an impact both on public health as well as the overall economy.

"The World Health Organisation estimates that every $1 invested in water and sanitation infrastructure would provide an economic return of more than $3," added Pires.

The loan will also support a growing trend of private sector partnership in Brazil’s water and sanitation sector.

AEGEA chairman Hamilton Amadeo outlined the company’s willingness to work with the government to tackle the problem in the country.

"Our strategy is to quickly increase service coverage, improve service quality, and gain operational efficiencies so the population immediately realises the benefits of our presence," said Amadeo.

"Sewage collection and treatment is still quite low throughout Brazil, and it is a more pronounced problem in the poorer states in the north and north-east of Brazil. Our company is ready and willing to work with governments to tackle this problem. IFC’s support will be key to implementing this strategy," Amadeo added.

The company recently acquired 16 concessions in the state of Mato Grosso and signed a public-private partnership to provide sewage in Piracicaba, in the state of Sao Paulo, where it is expected to reach 100% collection and treatment by 2013.

IFC’s loan is also expected to assist the broader development of Brazil’s growing private sector participation in the water and sanitation sector, which now accounts for only 10% of operations.