Minas Gerais plans US$630mn PPP for water and sewage expansion

Brazil’s Minas Gerais state announced a plan for a PPP contract that will demand investments of 3.5bn reais (US$630mn) to expand sanitation coverage.

A public consultation process that will run until November 25 was launched on Thursday, and the state plans to hold the auction for the contract before the end of the year.

More than 1mn people in 92 municipalities will benefit from improved access to drinking water and sewage treatment, the state government said in a statement.  

“This will be the first PPP in the country that will go beyond large urban centers, proposing sustainable water and sewage solutions for rural areas as well," it said.

The PPP is part of the Água dos Vales project that is aiming to improve sanitation coverage in the poor municipalities of Jequitinhonha and Mucuri, where development has historically been held back by a lack of infrastructure and essential services.

The state government said the municipalities “are among the most deprived in the country, with only 60% of households receiving treated water and 40% sewage collection.”

The country’s regulatory framework establishes that by 2033, 99% of the Brazilian population must have access to drinking water and 90% to sewage collection and treatment.

In the PPP with state-run firm Copasa, the private firm will be responsible for the investments and operations.

Copasa will monitor the execution of the investments and compliance with goals and performance indicators.

The technical studies for the PPP are being conducted by the IFC and Brazilian development bank BNDES.