Sabesp seeks JICA financing for US$2.47bn projects

Tuesday, February 15, 2011

Brazil's São Paulo state water utility Sabesp (Bovespa: SBSP3, NYSE: SBS) is planning environmental cleanup and water loss control projects worth US$2.47bn in total.

Phase IV of the company's Tietê river sanitation project will cost US$1.9bn, while phase II of its water loss control program has been budgeted at US$572mn, Sabesp said in a release.

Brazil's sanitation and water resources secretary Edson Giriboni and Sabesp president Dilma Pena are currently in Tokyo negotiating financing with the Japan International Cooperation Agency (JICA).

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Sabesp has already signed a US$200mn financing agreement with JICA for phase II of the Onda Limpa (Clean Wave) environmental cleanup program. The firm now hopes to secure US$366mn for its water loss control program and an unstipulated amount for the Tietê project.


Phase IV of the Tietê river cleanup project is aimed at increasing wastewater collection and treatment coverage in the São Paulo metropolitan area to 95% and 93% respectively.

The project began in the 1990s, and work is underway on phase III, which is budgeted at US$1.05bn. Once this stage is complete, wastewater collection will reach 87% and treatment 84%.


Sabesp's water loss control program intends to reach a 13% loss rate by 2019. The initiative has already seen water losses decrease to 26% from 29.5% since it began in 2009.

The program should see total investments of 3.4bn reais (US$2.04bn), according to the release.

Phase I of the initiative received 700mn reais in financing from national development bank BNDES. Phase II is scheduled for completion in 2013.