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Sao Paulo, Brazil, June 30th, 2021 – IFC, a member of World Bank Group, signed an agreement today to help Companhia Riograndense de Saneamento (Corsan), a water and sanitation services provider wholly owned by the State of Rio Grande do Sul in Brazil, reduce water losses in the distribution system and boost energy efficiency in its operations. IFC will provide Corsan with a sustainability-linked loan in Brazilian Real with an initial tranche worth BRL300 million. The investment is aligned with IFC's strategy for Brazil to improve the quality and reach of water supply and sewage services. These efforts are aimed at improving access to water for the most vulnerable populations, while delivering a positive environmental impact. Brazil has 12 percent of the surface freshwater available globally and is one of the wealthiest countries in water resources. However, there are increased risks to continuous water supply to the population, due to droughts and distribution inefficiencies. Extended periods with reduced rainfall are becoming more frequent and noticeable throughout the country. Water losses in the country's distribution systems average 39 percent of the water treated. Rio Grande do Sul has experienced droughts in recent years. IFC's investment in Corsan will help the company address an urgent need to reduce water losses in its distribution, which reached 44 percent in 2019. The company is also implementing several other initiatives aimed at achieving the 2033 coverage targets for water and sewage services determined in the new law. Corsan plans to invest more than BRL9 billion by 2033. IFC will support Corsan through the Utilities for Climate (U4C) initiative, which combines advisory and investment to help water utilities tackle their most pressing needs and establish stronger, long term relationships. The advisory work, which is being delivered through support from the Government of Japan, is helping Corsan diagnose and plan priority locations and interventions in its objective to reduce water losses. The investments will support Corsan's water loss program and energy efficiency improvement efforts through network replacement and substitution of obsolete electric pumps and hydrometers. This will enhance water supply resilience and efficiency, thus contributing to the Company's performance improvement. This is IFC's first U4C engagement in Latin America. "At this serious moment in which Brazil is discussing water and electricity shortages, this project is of fundamental importance. In addition, Corsan's transformation to a more efficient company involves partnerships with entities of recognized expertise and credibility such as the World Bank Group's IFC. We are very pleased to sign this partnership, which I hope will be a long one," says Douglas Casagrande, Corsan's Chief Financial and Investor Relations Officer. IFC's loan to Corsan will be one of IFC's first sustainability-linked loans in infrastructure globally and the first one in Latin America. This type of loan provides a financial incentive for borrowers to achieve targets linked to the Sustainable Development Goals (SDGs). The loan contemplates an incentive to improve water efficiency – the interest rate will be reduced if Corsan reduces its water losses in distribution to less than 35 percent by 2024. "Water and sanitation are the number one priority of IFC in the country. Investments in critical infrastructure are key to ensure that Brazil has steady supplies of water and a continued sustainable development, and we hope that this project provides the framework for future water infrastructure projects," says Carlos Leiria Pinto, IFC's Country Manager in Brazil. "We are very pleased to support Corsan in its commitments to SDG 6 – ensure water and sanitation for all. The company has a robust investment plan to substantially improve service coverage, particularly in sanitation, and enhance network efficiency", said Adil Marghub, IFC's Regional Head of Infrastructure for Latin America and the Caribbean. IFC is a leader in the water and sanitation sector in emerging markets across the globe. This project is part of IFC's Cities Initiative, which combines investment and advisory services to help municipal authorities build climate-resilient, inclusive and sustainable cities. Since 2004, IFC has invested and mobilized over US$9 billion in more than 280 projects in the cities' infrastructure space. About Companhia Riograndense de Saneamento (Corsan)Corsan is responsible for the construction and operation of the public drinking water supply and sanitary sewage services in the state of Rio Grande do Sul (RS). The Company operates in 317 out of 497 municipalities and has 96.7% of universal access to potable water in managed urban areas and 16.3% universal access to sewage. Its coverage reaches about six million people. Corsan is also active in treating industrial effluents and solid residues from the III Petrochemical Pole, headquartered in Triunfo (RS), as well as industrial effluents produced by the General Motors do Brasil Automotive Industrial Complex, in the municipality of Gravataí (RS). Corsan, headquartered in Porto Alegre, is a mixed capital company, whose shareholding control is exercised by the State of Rio Grande do Sul. About IFCIFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org. Stay Connectedwww.ifc.org/lacwww.twitter.com/IFC_LACwww.linkedin.com/company/ifc-américa-latina-y-el-caribewww.facebook.com/IFCwbgwww.instagram.com/ifc_org/www.youtube.com/IFCvideocastswww.twitter.com/IFC_orgwww.ifc.org/SocialMediaIndex
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