Bahia water utility Embasa to invest in supply expansion

Embasa, the water utility of Brazil's Bahia state, is planning to invest 364mn reais (US$70mn) to expand supply.

Some 800,000 residents in the localities of Conceição da Feira, Feira de Santana, Itiruçu, Jaguaquara, Lajedo do Tabocal, Planaltino, Santa Bárbara, Santanópolis and Tanquinho will benefit, the regional development ministry said in a statement. 

The ministry authorized the company to raise 320mn reais to finance its investment with the issue of infrastructure debentures. The operation requires government approval because the bonds involve tax exemptions for investors. 

"The funds to be raised are aimed at expanding the system's supply capacity to serve new expansion zones … increase the reserve capacity and vectorize the structuring distribution networks in the Tomba supply sector in Feira de Santana; expand water production, in quantity and quality, to meet the demand in rainy seasons and integrate the municipal supply systems into a single system, promoting greater flexibility and lower operating costs," the ministry said.

Embasa will use own cash to finance the rest of the investment.

Of the total, 143mn reais will be for expanding the production and pipeline system, while 44.5mn reais will go to the Feira de Santana supply system and 176mn reais to Planaltino's integrated water supply system.