Water supply and sanitation in Brazil

Brazil Brazil Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people... : Water and Sanitation

Data
Access to piped water supply	77% (2006)
Access to improved sanitation Improved sanitation According to the Joint Monitoring Programme for Water Supply and Sanitation by the World Health Organization and UNICEF the following are considered as "improved" sanitation:* connection to a public sewer* connection to a septic system* pour-flush latrine...	77% (2006)
Continuity of supply (%)	n/a
Average urban water use (l/c/d)	143
Average urban water and sanitation tariff (US$/m3)	0.82 (2006)
Share of household metering	76%
Share of collected wastewater treated	35% (2000)
Annual investment in WSS	US$14/capita (2006)
Share of self-financing by utilities	51% (2004)
Share of tax-financing	n/a
Share of external financing	n/a
Institutions
Decentralization to municipalities	Substantial
National water and sanitation company	None
Water and sanitation regulator	State-level multi-sector
Responsibility for policy setting	Ministry of Cities
Sector law	Yes
Number of urban service providers	26 State Companies, >1500 municipalities for water, >4500 municipalities for sanitation
Number of rural service providers	n/a

Water supply
Water supply
Water supply is the provision of water by public utilities, commercial organisations, community endeavours or by individuals, usually via a system of pumps and pipes...

and sanitation
Sanitation
Sanitation is the hygienic means of promoting health through prevention of human contact with the hazards of wastes. Hazards can be either physical, microbiological, biological or chemical agents of disease. Wastes that can cause health problems are human and animal feces, solid wastes, domestic...

in Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...

is characterized by both achievements and challenges. Among the achievements is an increase in access to piped water supply from 66% to 77% between 1990 and 2006; an increase in access to improved sanitation

Improved sanitation

According to the Joint Monitoring Programme for Water Supply and Sanitation by the World Health Organization and UNICEF the following are considered as "improved" sanitation:* connection to a public sewer* connection to a septic system* pour-flush latrine...

from 71% to 77% in the same period; a functioning national system to finance water and sanitation infrastructure; a high level of cost recovery compared to most other developing countries; as well as a number of notable technical and financial innovations such as condominial sewerage

Condominial sewerage

Condominial sewerage is the application of simplified sewerage coupled with consultations and ongoing interactions between users and agencies during planning and implementation. The term is used primarily in Latin America, particularly in Brazil, and is derived from the term condominio ....

and an output-based subsidy for treated wastewater called PRODES

PRODES

PRODES is an innovative program by the Brazilian federal government to finance wastewater treatment plants while providing financial incentives to properly operate and maintain the plants...

.

Among the challenges is the still high number of poor Brazilians living in urban slums and in rural areas without access to piped water or sanitation; water scarcity in the Northeast of Brazil; water pollution, especially in the South-East of the country; the low share of collected wastewater that is being treated (35% in 2000); and long-standing tensions between the federal, state and municipal governments about their respective roles in the sector.

Access

		Urban (84% of the population)	Rural (16% of the population)	Total
Water	Improved water source Improved water source According to the Joint Monitoring Program for Water Supply and Sanitation by the World Health Organization and UNICEF the following are considered as "improved" water sources:* household connections* public standpipes* boreholes* protected dug wells...	96%	57%	90%
Water	House connections	91%	17%	79%
Sanitation	Improved sanitation Improved sanitation According to the Joint Monitoring Programme for Water Supply and Sanitation by the World Health Organization and UNICEF the following are considered as "improved" sanitation:* connection to a public sewer* connection to a septic system* pour-flush latrine...	83%	37%	75%
Sanitation	Sewerage	53%	5%	45%

Access to piped water supply in Brazil stood at 77% and access to improved sanitation also at 77% in 2006. Coverage is significantly higher in urban areas, where 84% of the Brazilian population live. Urban coverage is 96% for water and 83% for improved sanitation, including 53% access to sewerage

Sanitary sewer

A sanitary sewer is a separate underground carriage system specifically for transporting sewage from houses and commercial buildings to treatment or disposal. Sanitary sewers serving industrial areas also carry industrial wastewater...

, the remainder being accounted for by on-site sanitation. Coverage in rural areas, where 16% of Brazil’s population lives, is much lower. It stands at 57% for improved water supply and only 37% for improved sanitation. Geographically coverage is lowest in the country’s poorest regions: particularly in predominantly rural North, Northeast, and Center-West.

Water use

Average water use in Brazil for users served by utilities fell from 217 to 143 liter/capita/day over the past years (-34%). Water use in Brazilian cities is lower than in some other Latin American cities (370 in Buenos Aires, 259 across cities in Peru, 196 across cities in Chile) and is now much closer to levels in Central Europe (165 in France, 150 in England and 122 in Germany). Increased metering and a higher share of low-income users with low per capita water use may have played a role in the reduced water use.

Reaching the poor

Reaching poor urban neighborhoods remains a challenge. This frequently requires non-conventional approaches. While Brazil has pioneered the use of low cost appropriate technology (such as condominial sewers

Condominial sewerage

) and active community participation it still faces the challenge of the many informal peri-urban settlements, called favela

Favela

A favela is the generally used term for a shanty town in Brazil. In the late 18th century, the first settlements were called bairros africanos . This was the place where former slaves with no land ownership and no options for work lived. Over the years, many freed black slaves moved in...

s, often situated on steep slopes or in flood plains. An example of how the government addresses these issues is the World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

-supported Low Income Sanitation Technical Assistance Project PROSANEAR.

Pollution

Brazil’s major and medium size metropolitan areas face increasing problems of water pollution

Pollution

Pollution is the introduction of contaminants into a natural environment that causes instability, disorder, harm or discomfort to the ecosystem i.e. physical systems or living organisms. Pollution can take the form of chemical substances or energy, such as noise, heat or light...

. Coastal cities such as Rio de Janeiro

Rio de Janeiro

Rio de Janeiro , commonly referred to simply as Rio, is the capital city of the State of Rio de Janeiro, the second largest city of Brazil, and the third largest metropolitan area and agglomeration in South America, boasting approximately 6.3 million people within the city proper, making it the 6th...

, São Paulo

São Paulo

São Paulo is the largest city in Brazil, the largest city in the southern hemisphere and South America, and the world's seventh largest city by population. The metropolis is anchor to the São Paulo metropolitan area, ranked as the second-most populous metropolitan area in the Americas and among...

and Recife

Recife

Recife is the fifth-largest metropolitan area in Brazil with 4,136,506 inhabitants, the largest metropolitan area of the North/Northeast Regions, the 5th-largest metropolitan influence area in Brazil, and the capital and largest city of the state of Pernambuco. The population of the city proper...

suffer effects of upstream residential and industrial sewage contaminating feeder rivers, lakes, and the ocean. In 2000, only 35% of collected wastewater received any treatment.

For example, the Tietê River

Tietê River

The Tietê River is a Brazilian river in the state of São Paulo.The source is in Salesópolis in the Serra do Mar, at 1,120 m altitude...

, which runs through the São Paulo metropolitan area (17 million inhabitants), has returned to its 1990 pollution levels. Despite the support from the IDB

IDB

IDB can mean:* Inter-American Development Bank, also known as IADB* IDB Communications Group, Inc., a constituent of MCI Inc.* Illegal Diamond Buying, the term used at the turn of the 19th-20th century for diamond trading outside the De Beers cartel....

, the World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

and Caixa Econômica Federal

Caixa Econômica Federal

Caixa Econômica Federal , also referred to as Caixa or CEF, is a Brazilian bank. It is the largest government-owned financial institution in Latin America. It is the largest bank in Brazil and in Latin America by assets....

in a US$400 million clean up effort, the level of dissolved oxygen has returned to the critical level of 1990 at 0 mg per liter due to increased levels of unregulated sewerage, phosphorus, and ammonia nitrogen discharged into the river. The state water company Sabesp

Sabesp

Sabesp is a Brazilian state owned utility that provides water and sewage services to residential, commercial and industrial use in the São Paulo and in 364 of the 645 municipalities in São Paulo State, Brazil...

projects that a minimum of R$3 billion (US$1.7bn) would be necessary to clean up the river.

See also Water management in the Metropolitan Region of São Paulo

Water management in the Metropolitan Region of São Paulo

Water management in the Metropolitan Region of São Paulo faces several challenges, including pollution of drinking water reservoirs that are surrounded by slums, water scarcity leading to conflicts with the Campinas Metropolitan area to the north, inefficient water use, and flooding...

)

History and recent developments

The water and sanitation sector has gradually evolved over time. The changes that have occurred have largely been the product of political, economic, social and cultural factors external to the sector.

Municipal service provision (prior to 1968)

Until 1968, the responsibility for water supply and sanitation was municipal. Service providers were municipal water and drainage companies, each of them with different financial and administrative structures. The federal role was limited to the Special Service for Public Health, which lacked funding as well as regulatory or enforcement capacity. At that time coverage rates were low and there was no institutional structure to plan and finance an increase in coverage on the necessary scale. The military regime that took power in 1964 initially did not intervene in the structure of the sector. The central role of municipalities in water supply and sanitation was thus confirmed by the 1967 Federal Constitution, only to be fundamentally altered a year later.

The National Water Supply and Sanitation Plan PLANASA (1968-1986)

To address the challenges in the sector, the National Water Supply and Sanitation System was created in 1968. It was supported by three newly created institutions:

the National Housing Bank (Banco Nacional de Habitação) or BNH;
the Employment Guarantee Fund (FGTS), the main source of funds for Planasa; and
27 state-owned water and sanitation companies (Companhias Estaduais de Saneamento Básico or CESBs).

Planasa was the first federal government initiative in water and sanitation in Brazil. BNH managed the FGTS and, by extension, national urban development policy. Beginning in 1971 State Water and Sanitation Companies (CESBs) were set up in every Brazilian state. Until 1985, only these public companies could obtain financing from BNH for water supply and sanitation, being responsible for construction, operation and maintenance. In order for CESBs to operate in their respective states, they had to obtain municipal licenses to run the services under long-term contracts, because the Brazilian Constitution had already established that the power to grant licences for public water and sanitation services belonged to the municipalities.

The favorable performance of the economy, the scale of the system being installed, the amount of funds available and the subsidized interest rates on loans, all helped services to expand quickly. Between 1970 and 1990, PLANASA expanded coverage from 45% to 95% for water and 24% to 42% for sanitation among urban residents Due to their larger territorial scope, state water companies were able to cross-subsidize between different classes of consumers, especially between grossly disparate neighboring municipalities.

The coverage expansion happened unequally. Investment in water services was given priority because it was less costly and produced a quicker return through water charges. In addition, although there was significant expansion of services all over Brazil, Planasa gave priority to the country's richer regions of the South and South East; most of the investment was concentrated in the larger cities, and within these cities, in the better-off sections of the population. About 3,200 of Brazil’s municipalities took advantage of PLANASA (although often without formal contracts), granting concessions to these state companies for 20-30 years. 1,800 municipalities chose to continue providing services directly on their own or indirectly through municipal companies, most of them in the relatively wealthy South-eastern region, particularly in Minas Gerais

Minas Gerais

Minas Gerais is one of the 26 states of Brazil, of which it is the second most populous, the third richest, and the fourth largest in area. Minas Gerais is the Brazilian state with the largest number of Presidents of Brazil, the current one, Dilma Rousseff, being one of them. The capital is the...

and São Paulo

São Paulo

.

Other municipalities retained partial autonomy, linked to a Health Ministry entity, now known as the National Health Foundation (Funasa). They operated in accordance with the model established by the Special Service for Public Health over 40 years ago. Services are operated by a municipal agency which is administratively, technically and financially autonomous, but in which there is considerable input from Funasa, whose functions range from administration to technical assistance. In 1993 about 6% of Brazilian municipalities functioned under this system in 625 locations. They are largely concentrated in the North-eastern region.

Planasa coincided with the period of military government in Brazil (1964-1985) (see also History of Brazil), which has left its mark on the corporate culture of the state water companies at the time. For example, Lemos and Oiveira labeled the state water and sanitation companies as "pre-democratic institutions" that perceived themselves as “islands of competence,” constituting an “infallible technocracy” which systemically warded off public involvement in policy-making. PLANASA also reduced the role of many municipal governments to signing concession contracts with state water companies, leaving them with a sense of marginalization. The return to democracy and the decline in federal funding encouraged many states and municipalities to devolve services to the local level. Some also began to seek private concessions. Water and sanitation policy thus entered a new era that was characterized by an environment of increasing legal uncertainty and political controversy.

Gradual municipalization, some private sector participation (1986 - 2002)

In 1986 the Housing Bank BNH was dissolved and management of the FGTS, the key financing instrument for the sector, was passed on to the Caixa Econômica Federal (CEF), under the supervision and control of the Supervisory Council of the FGTS (CCFGTS). However, the sector policy functions of BNH were not passed on to CEF and national policy for sanitation became the responsibility of various bodies in charge of urban management. PLANASA was formally abolished in 1992, making it more difficult for state governments to finance state water companies.

The 1988 Federal Constitution does not clearly assign the responsibility for water supply and sanitation to either munitipalities or states. Both can implement programs, provided the basic guidelines issued by the Federal Government are followed. A complicated web of un-enforced or weakly enforced statutory requirements (e.g. permit requirements) persisted. An effect of the new constitution was to render the responsibility for water provision “less clearly defined”. Article 30 of the 1988 constitution allows municipal government to legislate in matters of “local interest” and to “organize and provide, directly or by concession or permit, the public services of local interest,” but does not resolve a variety of “unclear property rights” questions relating to the concession authority of municipalities. Nevertheless, state water companies continue to be regulated almost exclusively by state governments.

State governments have adopted different strategies during the 1990s. Some, such as those of Rio de Janeiro

Rio de Janeiro

and of Espírito Santo

Espírito Santo

Espírito Santo is one of the states of southeastern Brazil, often referred to by the abbreviation "ES". Its capital is Vitória and the largest city is Vila Velha. The name of the state means literally "holy spirit" after the Holy Ghost of Christianity...

, attempted to grant concessions to the private sector. Others, such as Mato Grosso do Sul

Mato Grosso do Sul

Mato Grosso do Sul is one of the states of Brazil.Neighboring Brazilian states are Mato Grosso, Goiás, Minas Gerais, São Paulo and Paraná. It also borders the countries of Paraguay and Bolivia to the west. The economy of the state is largely based on agriculture and cattle-raising...

, returned the operation of services to the municipalities. Other states, such as São Paulo

São Paulo

, Paraná

Paraná (state)

Paraná is one of the states of Brazil, located in the South of the country, bordered on the north by São Paulo state, on the east by the Atlantic Ocean, on the south by Santa Catarina state and the Misiones Province of Argentina, and on the west by Mato Grosso do Sul and the republic of Paraguay,...

and Ceará

Ceará

Ceará is one of the 27 states of Brazil, located in the northeastern part of the country, on the Atlantic coast. It is currently the 8th largest Brazilian State by population and the 17th by area. It is also one of the main touristic destinations in Brazil. The state capital is the city of...

, took a series of measures to strengthen their state companies. This strategy also included diversifying the origin of the funds, opening the company's capital to private investors, as well as contracting out the management of systems to local private operators.
In February 1995 The Public Concession Act was passed. It cast additional legal uncertainty on swathes of public concession contracts with state water companies and eviscerated relevant states on contract law. Nevertheless, since 1996 some 65 municipalities in 10 states have granted concessions to private operators, serving about 7 million people, or 4% of the population of Brazil.

The Lula administration (since 2003)

In January 2003 President Luiz Inácio Lula da Silva

Luiz Inácio Lula da Silva

Luiz Inácio Lula da Silva , known popularly as Lula, served as the 35th President of Brazil from 2003 to 2010.A founding member of the Workers' Party , he ran for President three times unsuccessfully, first in the 1989 election. Lula achieved victory in the 2002 election, and was inaugurated as...

assumed office. In the same year his government created a Ministry of Cities with a National Department of Environmental Sanitation, entrusted with the responsibility to monitor sector performance and to establish directives for "basic sanitation" (including water supply, sewerage, wastewater treatment and solid waste management, which are all covered by the Portuguese term saneamento básico). At the same time the Council of Cities was established, which has an important role in advising on sanitation policy and in approving it. The strengthening of the sector policy authority at the federal and municipal levels represented "a major departure from the past, when the provincial states had the leadership in basic sanitation policy."

In January 2007, at the beginning of his second term, the President signed a new federal water and sanitation law (Lei 11.445/07 para o saneamento básico) that outlines federal policies in the sector. The law aims at increasing investments to provide universal access to water and sanitation, while taking into account local specificities and using appropriate technologies that are in line with users' ability to pay. It also aims at increasing transparency and "social control". The law is a compromise between diverging interests of a broad array of stakeholders. It thus leaves some important issues undefined. One of these issues is the responsibility for service provision in large metropolitan areas, where some municipalities have challenged the constitutionality of service provision by state companies. The Supreme Court is expected to rule soon on two such cases. Nevertheless, the law fills a void by providing a legal basis for the role of the federal government in water and sanitation that had remained undefined during the previous 20 years. Léo Heller, professor of sanitary and environmental engineering at the Federal University of Minas Gerais, even called it "arguably the most important legislative innovation in basic sanitation sector in decades."

In the same month, the President announced a new Program for the Acceleration of Growth (PAC) that includes major investments in highways, airports, ports, energy, as well as providing housing, water and sewage that would benefit poor Brazilians. The program calls for a total of 504 billion real (235 billion U.S. dollars) through 2010, of which about 205 billion U.S. dollars would be provided by state-owned companies and the private sector, while the rest would come from the federal government.

Policy and regulation

At the national level the Ministry of Cities coordinates sector policies, which are implemented by various Ministries. For example, the Ministry of Health has certain attributions related to sanitation, and the Ministries of Regional Development and of Agriculture and Agrarian Reform have attributions in rural areas. Water resources management is the responsibility of the national water agency ANA.

The Council of Cities is "a consultative and decision-making body with the purpose of 'proposing goals for the formulation and implementation of national urban development policy, as well as monitoring and assessing its execution". It includes a Consultative Technical Committee for Environmental Sanitation. Similar structures exist at the state and municipal levels.

The National Water Supply and Sanitation Policy, approved by the Council of Cities, has identified six steps to improve service coverage and efficiency by encouraging a more competitive and better regulated environment: (1) the institutional separation of service providers and service regulators: (2) promotion of different decentralized alternatives for service provision; (3) promotion of social participation in service regulation and control; (4) use of low-cost technologies; (5) development of financially sustainable pricing schemes which include subsidies for low-income families where required to assure universal access to basic services; and (6) greater cooperation between federal and local authorities and civil society.

Regulation of service provision is a responsibility of the municipalities. Nevertheless, 14 Brazilian states have established regulatory agencies for public services that cover, among other sectors, water supply and sanitation. Given that the legal mandate for regulation rests with the municipalities, however, the role of these regulatory agencies in water and sanitation is minimal.

Service provision

According to the Brazilian constitution the provision of water and sanitation services is the responsibility of the country’s 5,560 municipalities (see List of major cities in Brazil). However, state water and sewer companies in each of Brazil’s 26 states (see States of Brazil) are in charge of water services in about 3,887 municipalities with a population of 103 million, corresponding to about 75% of Brazil's urban population with water connections. They are also in charge of sewer services in 893 municipalities with a population of 45 million, corresponding to about 55% of the population with access to sewerage. Most state water and sewer companies are mixed public-private companies with the majority of shares owned by the respective state government. Three state water companies - Sabesp

Sabesp

in São Paulo, Copasa in Minas Gerais

Minas Gerais

and Sanepar in Paraná

Paraná (state)

- have floated shares in the Brazilian stock market and one of them - Sabesp

Sabesp

- also at the New York Stock Exchange

New York Stock Exchange

The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...

. One state company, Saneatins in Tocantins

Tocantins

Tocantins may refer to:* Tocantins, a state in Brazil* Tocantins River, a river in Brazil* Survivor: Tocantins, a reality show set in Tocantins, Brazil* Tocantins Esporte Clube, a Brazilian football club...

, is majority-owned by the private sector with the state government owning only a minority of shares.

Some state companies operate under concession contracts with municipalities, while others operate under the authority of state governments. In some cases municipalities have challenged the legality of service provision by state companies that do not have concession contracts with municipalities.
See also: Water privatization in Brazil

Water privatization in Brazil

Water privatization in Brazil has been initiated in 1996. In 2008 private companies provided 7 million Brazilians - 4% of the urban population - in 10 of the country’s 26 states with drinking water...

Since 1996 65 municipalities in 10 states (Rio de Janeiro

Rio de Janeiro

, São Paulo

São Paulo

, Paraná

Paraná (state)

, Espírito Santo

Espírito Santo

, Mato Grosso

Mato Grosso

Mato Grosso is one of the states of Brazil, the third largest in area, located in the western part of the country.Neighboring states are Rondônia, Amazonas, Pará, Tocantins, Goiás and Mato Grosso do Sul. It also borders Bolivia to the southwest...

and Pará

Pará

Pará is a state in the north of Brazil. It borders the Brazilian states of Amapá, Maranhão, Tocantins, Mato Grosso, Amazonas and Roraima. To the northwest it also borders Guyana and Suriname, and to the northeast it borders the Atlantic Ocean. The capital is Belém.Pará is the most populous state...

among others) that serve 7 million customers signed concession contracts with private service providers either to provide only water services, only sewer services or both.

According to the World Bank's Private Participation in Infrastructure database, investment commitments by the private sector in Brazil's water and sanitation sector reached US$ 3 bn in 1994-2004 through 52 projects. 3 projects were divestitures, 39 were concessions and 10 were greenfield projects in wastewater treatment plants.

Some public service providers, both at the state and the municipal level, perform very well, while other perform poorly. Likewise, some private concessions are quite successful, while others have not lived up to expectations and their obligations.

Utility associations

Municipal service providers are associated in the National Association of Municipal Water and Sanitation Service Providers ASSEMAE. State water and sanitation companies have formed the Association of State Companies for Water Supply and Basic Sanitation AESBE In 1996 private service providers have formed the Brazilian Association of Private Water and Sanitation Concessionnaire (ABCON).

Efficiency

Two common indicators of the operating efficiency of water and sanitation utilities are the level of non-revenue water

Non-revenue water

Non revenue water is water that has been produced and is “lost” before it reaches the customer. Losses can be real losses or apparent losses . High levels of NRW are detrimental to the financial viability of water utilities, as well to the quality of water itself...

(NRW) and labor productivity.

Non-revenue water in Brazil varies between 21% and a staggering 81%, reflecting huge differences in efficiency between service providers. The average level of NRW in Brazil in 2006 was 40%, roughly the same for state and municipal public water companies. The level has remained unchanged since 2000. The average NRW for private utilities, however, was only 30% in 2000.

Labor productivity. Many public utilities in Brazil are overstaffed. In 2000 the staff ratio was lowest for state utilities (3.7), much higher for municipal utilities (5.8) and - surprisingly - highest for privately operated utilities (6.4). Average labor productivity has since then increased from 4.4 to 3.7 employees/1000 water connections.

Tariffs

Tariff level. Water and sanitation tariffs in many Brazilian cities are relatively high compared to other Latin American cities. According to the urban water and sanitation information system SNIS the average water tariff of utilities participating in the system (which provide water services to 95% of the urban population) was the equivalent of US$ 0.68/m3 and the average sanitation tariff was US$ 0.67/m3, for a total of US$$ 1.35/m3 for those connected to the sewer network. This compares to US$ 0.81/m3 in Chilean cities, US$0.79/m3 in Argentine cities and US$0.51/m3 in Peruvian cities. The ratio of sanitation to water tariffs of almost 1:1 is very high for Latin America and close to the ratio of the actual cost of the two services, while in most other Latin American countries sewer tariffs remain much lower than water tariffs.

Water and sewer tariffs vary substantially between cities. According to a 2005 study by the Latin American association of water and sanitation regulators ADERASA the typical monthly residential water bill for a consumption of 20 cubic meters per month was equivalent to US$17 in São Paulo, US$15 in Espírito Santo and US$ 10 in Pernambuco, compared to an average of US$11 among the 21 Latin American cities covered.

Tariff structure and subsidies. In most parts of Brazil a low social tariff applies to the first block of consumption. In some cases a minimum consumption fee applies to all residential connections, and sometimes to commercial and institutional connections. Such subsidies benefit many who are not poor. However, some State Water Companies have improved the targeting of their social tariffs by using the cadastres established for the Bolsa Familia

Bolsa Família

Bolsa Família is a social welfare program of the Brazilian government, part of the Fome Zero network of federal assistance programs. Bolsa Família provides financial aid to poor Brazilian families; if they have children, families must ensure that the infants attend school and are vaccinated...

Conditional Cash Transfer

Conditional cash transfer programs aim to reduce poverty by making welfare programs conditional upon the receivers' actions. The government only transfers the money to persons who meet certain criteria...

program. This is the case in Paraná

Paraná (state)

(SANEPAR), Pernambuco

Water supply and sanitation in Pernambuco

Water supply and sanitation in Pernambuco is characterized by high levels of access to water supply in urban areas, but also by poor service quality , inadequate access to sanitation, and insufficient access to improved water sources and improved sanitation in rural areas.In urban areas, where 76%...

(COMPESA) and Bahia

Bahia

Bahia is one of the 26 states of Brazil, and is located in the northeastern part of the country on the Atlantic coast. It is the fourth most populous Brazilian state after São Paulo, Minas Gerais and Rio de Janeiro, and the fifth-largest in size...

(EMBASA). In these cases the social tariff is limited to about 10% of the company's customers.

Other utilities have introduced direct cash payments to needy families to help them pay their water bills. For example, the city of Brasilia

Brasília

Brasília is the capital city of Brazil. The name is commonly spelled Brasilia in English. The city and its District are located in the Central-West region of the country, along a plateau known as Planalto Central. It has a population of about 2,557,000 as of the 2008 IBGE estimate, making it the...

has introduced such a scheme. The Federal District pays the water utility an amount equivalent to the water and sewerage bills of poor families consuming less than 10 cubic meters per month. The State Water Company in Goiais has introduced a similar program. In each case, about 20,000 families benefit from the program. However, not many municipalities in Brazil have the institutional capacity to administer such a targeted subsidy scheme.

Change in tariffs over time. Tariffs in most cities increased moderately in the 2002-2005 period net of inflation. According to the SNIS the average urban water tariff increased by 57% and the average sanitation tariff increased by 54% in nominal value prices, while inflation stood at 40%, thus resulting in a moderate increase in real prices.

Affordability. According to data collected by the Pan-American Health Organization based on multi-purpose household surveys, the share of water expenditures in household expenditures in urban areas was the second-highest among 10 countries in Latin America and the Caribbean in the late 1990s. The share was on average 2.3% and 3.4% for households in the poorest income decile

Decile

* In descriptive statistics, any of the nine values that divide the sorted data into ten equal parts, so that each part represents 1/10 of the sample or population* In astrology, an aspect of 36 degrees-See also:*Percentile*Quantile*Quartile*Summary statistics...

Revenue collection

Overall revenue collection losses for state utilities in Brazil were about 12% in 2000, but this masks large variations among utilities. State utilities with the highest collection losses are in the North and those in the Center-West and South have consistently good collection ratios. A number of municipal utilities appear to have serious collection problems.

Investment

In 2005 total investment in water and sanitation by service providers participating in the national water and sanitation information system SNIS stood at 3.55 billion Brazilian Real

Brazilian real

The real is the present-day currency of Brazil. Its sign is R$ and its ISO code is BRL. It is subdivided into 100 centavos ....

s, including 1.53bn for water and 1.35bn for sanitation and 0.67bn for other investments. It has been estimated that investments in water and sanitation infrastructure in the order of R$ 9.6 billion (US$ 4.5bn or $24 per capita or 0.7% of GDP) per year, or almost three times the level of 2005, would be needed to achieve universal access. The Program for the Acceleration of Economic Growth raised investment levels since then.

Financing

The great majority of investments in water and sanitation in Brazil are financed from domestic resources, with some additional financing from international financial institutions. In general, utilities with the greatest need to improve performance and expand services find it hardest to access funding, partially because they do not know how to access funding (including grant funding), partially because of weak institutional capacity, and partially because of their lack of creditworthiness.

Self-financing. By far the major source of funding in 2004 was self-financing by the utilities, accounting for 1.82bn Reals or 51% of all financing. This is a remarkably high share by Latin American standards. However, it is less a reflection of financial strength of the utilities, but rather a symptom of a historically low level of investment in 2004.

State contributions funded by federal public banks and international financial institutions. The federally owned Caixa Economica Federal and the Brazilian Development Bank BNDES both play important roles in financing water supply and sanitation investments in Brazil. They administer large public pension funds, such as the FGTS, which invest, among others, in water and sanitation. However, loans from the Caixa and BNDES are not made directly to utilities, but to the states, which in turn pass on funds to the utilities as a non-reimbursable contribution to their capital. Loans to state governments from international financial institutions, such as the World Bank and the IDB, are also passed on to utilities as a non-reimbursable contribution to their capital.

The capital market. The financially most solid utilities also tap the capital market directly either through the Brazilian stock market or borrow from commercial Banks. The state water utility for São Paulo

São Paulo (state)

São Paulo is a state in Brazil. It is the major industrial and economic powerhouse of the Brazilian economy. Named after Saint Paul, São Paulo has the largest population, industrial complex, and economic production in the country. It is the richest state in Brazil...

, Sabesp

Sabesp

, is even listed on the New York Stock Exchange

New York Stock Exchange

.

Output-based grants from the federal government. Since 2001 the federal government "buys" treated wastewater through an innovative program called PRODES

PRODES

PRODES is an innovative program by the Brazilian federal government to finance wastewater treatment plants while providing financial incentives to properly operate and maintain the plants...

, which allows utilities to access federal grants if they properly operate and maintain their wastewater treatment plants.

The National Health Foundation FUNASA. For small towns and rural areas a major source of funding is the National Health Foundation FUNASA under the Ministry of Health, which has invested 890 million Reales in 3,500 municipalities benefitting 11.43 million people between 1995 and 1999, mainly through its Programa Alvorada.

Program for the Acceleration of Growth (PAC). In January 2007, the federal government announced a new Program for the Acceleration of Growth (PAC) that includes major investments in highways, airports, ports, energy, as well as providing housing, water and sewage that would benefit poor Brazilians. The program calls for a total of 504 billion real (235 billion U.S. dollars) through 2010, of which about 205 billion U.S. dollars would be provided by state-owned companies and the private sector, while the rest would come from the federal government.

External cooperation

The most important external partners supporting the development of the Brazilian water and sanitation sector are the Inter-American Development Bank

Inter-American Development Bank

The Inter-American Development Bank is the largest source of development financing for Latin America and the Caribbean...

(IDB), the World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

and Japan. Germany is also an important partner in some states. Support is provided in terms of financing as well as analytical and advisory activities.

Inter-American Development Bank

BR-L1005 : Igarapes de Manaus Environmental-Social Program

Approved on November 30, 2005, the US$140 million loan provides for sanitary infrastructure and institutional strengthening in the Educandos-Cuarenta basin.

BR0324 : Ceara Sanitation Program

Approved on November 26, 2003, the US$100 million loan aims to improve the sanitary and environmental conditions of the State of Ceará.

Goiania Water and Sanitation

Approved on July 17, 2002, the US$47.6 million loan aims to improve water supply and sanitation in the city of Goiania.

BR0269 : Social Program Water Sewerage Small Municipal

Approved on October 17, 2001, the US$100 million loan provided for the construction of water and sewerage systems in communities for low-income communities of up to 75,000 inhabitants where HDI is below the national average.

BR0345 : Federal District Sanitation Program

Approved on December 6, 2000, the US$130 million loan aims to improve potable water and sewerage services, institutional efficiency, financial sustainability, private sector participation in management and investment financing for the Federal District of Brasília.

BR0265 : Tiete River Decontamination, Stage II

Approved on October 20, 1999, the US$200 million loan aims to improve the environmental quality of the Tiete River basin in the São Paulo Metropolitan Region.

World Bank

Loans. Loans provide not only infrastructure financing, but also policy advice and capacity building in order to improve the institutional framework for improved service delivery.

Dedicated water and sanitation loans

Municipal Adapatable Pprogram Lending Phase 1: Uberaba

Approved on March 21, 2007, the US$28.78 million loan aims to promote better living conditions for the Uberaba Municipality through the integration of several components, including, flood protection (41%), sewerage (31%), and water supply 15%).

Brasilia Environmentally Sustainable Project

Approved on August 25, 2005, 70% of the US$159.04 loan aims at financing water, sanitation, and flood protection sector.

Espirito Santo Water & Coastal Pollution Management

Approved on July 1, 2004, the US$62.3 loan is aimed at improving sewerage (75%) and water supply (15%) in the state of Espirito Santo.

Water Sector Modernization Project (02)

Approval March 5, 1998, the US$300 million loan aims to improve the sewerage (53%) and water supply (36%) sectors.

Other loans with water and sanitation components

Additional Financing for the Rural Poverty Reduction Project - Pernambuco

Approved on October 19, 2006, the US$40 million loan aims at financing basic social and economic infrastructure, including, water supply (15%).

Bahia Poor Urban Areas Integrated Development

Approved on December 6, 2005, the US$82.2 million loan aims at reducing urban poverty in a sustainable manner in the city of Salvador as well as other cities in the State of Bahia. The water, sanitation and flood protection sector receives 25% of the loan.

Rural Poverty Reduction Project - Minas Gerais

Approved on September 6, 2005, the US$46.8 million loan aims to assist the State of Minas Gerais to reduce high levels of poverty through several aspects, including, improvement of sewerage infrastructure (20%).

Ceara Multi-sector Social Inclusion Development

Approved July 12, 2005, the US$649 million loan aims to strengthen social inclusion in the State of Ceará through 24% of expenditures in water, sanitation, and flood protection.

Amapa Sustainable Communities

Approved on December 7, 2004, the US$6.81 million loan aims to reduce urban and rural poverty through 25% expenditures in the water, sanitation, and flood protection sector.

Integrated Municipal Project - Betim Municipality

Approved on July 1, 2004, the US$49.07 loan aims to assist the Betim Municipality in improving sewerage (40%).

Recife Urban Upgrading Project

Approved on April 24, 2003, the US$84 million loan seeks to enhance urbanization by improving water supply (30%) and solid waste management (30%).

Technical assistance, analysis and advice:

Low Income Sanitation Technical Assistace Project - Prosanear - TAL

Approved on January 6, 2000, the US$47 million technical assistance loan aims at improving the general water, sanitation, and flood protection sector (18%).

How to revitalize infrastructure investments in Brazil: public policies for better private participation, 2007

Japan

Sanitation Improvement Project for the Baixada Santista Metropolitan Region

Approved on August 6, 2004, the 21.32 billion Yen loan finances the improvement and expansion of the sewage system and the development of an environmental monitoring system and improved water quality.

Germany

Germany supports water supply and sanitation projects in small and medium towns of the mostly poor and arid North-East of Brazil, as well as in the metropolitan area of Belo Horizonte.

External links

In English:

Presentation on the national water and sanitation system SNIS Presentation World Bank 2004
Water, Poverty Reduction, and Sustainable Development in Brazil, World Bank 2003
Brazilian Development Bank BNDES
Caixa Econômica Federal CEF
National Water Agency ANA
WHO
Who
Who may refer to:* Who , an English-language pronoun* who , a Unix command* Who?, one of the Five Ws in journalism- Art and entertainment :* Who? , a 1958 novel by Algis Budrys...

/UNICEF Joint Monitoring Program
Body of Knowledge on Infrastructure Regulation

In Portuguese:

Associação Brasileira de Engenharia Sanitária e Ambiental
Ministério das Cidades (Ministry of Cities)
Ministério da Fazenda (Ministry of Finance)
Ministério do Planejamento, Orçamento e Gestão (Ministry of Planning)
National water and sanitation information system SNIS
Fundação Nacional de Saúde FUNASA
Brazilian Federal Applied Economic Research Institute IPEA
WHO
Who
Who may refer to:* Who , an English-language pronoun* who , a Unix command* Who?, one of the Five Ws in journalism- Art and entertainment :* Who? , a 1958 novel by Algis Budrys...

Evaluation 2000 Brasil

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