Sao Paulo, Brazil, July 10, 2012
—IFC, a member of the World Bank Group, signed a loan agreement with AEGEA Saneamento, one of Brazil’s leading private operators of water and sanitation services, to expand its services in low-income regions such as North and Northeast Brazil that lack sufficient sewerage coverage.
IFC will provide a $53 million local-currency loan—equivalent to 100 million Brazilian reais—to AEGEA. The financing will help the company nearly double its water supply and sewerage services, benefiting a total of 2 million people by 2016. It will also help address a serious challenge in Brazil, where less than half the population is served by wastewater collection services and only 30 percent of sewage is treated. The problem is worse in the country’s poorer regions. AEGEA’s expansion will help improve public health, quality of life, and economic productivity for nearly 1 million Brazilians.
“Investing in water and sanitation service coverage has a positive impact on public health expenditures and on the economy as a whole,” said Loy Pires, IFC’s Country Manager in Brazil. “The World Health Organization estimates that every $1 invested in water and sanitation infrastructure would provide an economic return of more than $3. Improving access to piped water and sewerage also helps low-income households overcome poverty by reducing expenditures for drinking water and health services.”
AEGEA Saneamento has a recognized track record in Brazil, having more than doubled sewerage collection and treatment in the states of Mato Grosso do Sul and Rio de Janeiro. It is known for improving service quality and efficiency. The company recently acquired 16 concessions in the state of Mato Grosso and has signed a public-private partnership to provide sewage in Piracicaba, in the state of Sao Paulo, where it is expected to reach 100 percent collection and treatment by 2013.
“Our strategy is to quickly increase service coverage, improve service quality, and gain operational efficiencies so the population immediately realizes the benefits of our presence,” said Hamilton Amadeo, chairman of AEGEA. “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 Northeast 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.”
IFC’s loan will also support the broader development of Brazil’s growing private sector participation in the water and sanitation sector, which now accounts for only 10 percent of operations. By demonstrating the profitability of these services, IFC’s loan and AEGEA’s growth will encourage private investment in water and sanitation services, ushering in market-based solutions to a longstanding challenge in Brazil.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilizing capital in the international financial markets. In fiscal 2011, amid economic uncertainty across the globe, we helped our clients create jobs, strengthen environmental performance, and contribute to their local communities—all while driving our investments to an all-time high of nearly $19 billion. For more information, visit
www.ifc.org
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About AEGEA
AEGEA is the sanitation holding company of Equipav Group. AEGEA generated net revenues of 327 million Brazilian reais in 2011, an increase of 20 percent compared to 2010. The performance reflects the company's increased focus on the growing sanitation sector. With over 50 years of experience, Equipav Group has a strong presence in the infrastructure sector. Comprising mining, engineering, sanitation, road, and sugarcane companies, Equipav Group has a workforce of more than 2,000 employees, and its subsidiaries have annual revenues of about 800 million Brazilian reais.
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