Washington, D.C./São Paulo, Brazil, November 2, 2011
—IFC, a member of the World Bank Group, will prepare a new manual showing how performance-based contracts can help Brazilian water utilities become more efficient.
The Water Utilities Performance-Based Contracting manual, to be called WAP, will highlight ways that utilities can enhance their efficiency—by reducing water losses, optimizing electricity consumption, and improving fee collection from customers.
The manual will be prepared by a multidisciplinary team of senior consultants led by Gesner Oliveira, main partner of GO Associados and former CEO of SABESP, Brazil’s largest water company. A senior team of IFC and World Bank experts will oversee the project and will convene a series of high-level discussions with sector professionals in Brazil. The first discussion will occur on November 8 in São Paulo, hosted by the Grupo de Economia de Saneamento, Energia e Soluções Ambientais from Fundação Getúlio Vargas (FGV).
Currently, for each 100 liters of water treated in Brazil, almost 40 liters fail to reach the population or are not invoiced. In some regions, the level of water losses surpasses 60 percent. Despite being large energy consumers, few water companies have structured and organized energy efficiency programs.
“This manual is part of IFC’s effort to help improve the operational and commercial efficiency of Brazil’s water utilities, which can lead to better services at lower costs for the population,” said Loy Pires, IFC’s Country Manager in Brazil.
Under performance contracts, the focus of the IFC-sponsored manual, engineering companies are hired to identify savings opportunities and carry out the investments needed to realize such savings. Their compensation for these services is received as participation in savings realized over a certain period. This generates a win-win situation. All gains accrue to the public entity after a specified period.
Performance-based contracts are especially appropriate in Brazil, where water utilities have limited financial and technical capacity to implement complex projects and absorb the associated risks. By leveraging the private sector’s capacity and interest in taking risks, more projects can be implemented.
“The manual will be developed in a cooperative manner to facilitate its use and dissemination among public and private water utilities, and by all companies active in the sector,” said Oliveira.
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
.
About GO Associados:
GO Associados is a multidisciplinary consultancy based in São Paulo. It is focused on modeling infrastructure projects and public-private partnerships for the private and public sectors. GO Associados also develops studies designed to support the development of innovative public policies with a focus on competition policy and regulatory issues. For more information, visit
www.goassociados.com.br
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