Sep 25, 2020

 The Brazilian Development Bank (BNDES) and the state of Alagoas received seven proposals from consortiums interested in the regionalized concession of water supply and sewage services in the Metropolitan Region of Maceió. The deadline for delivery of envelopes ended on Friday. The auction will take place next Wednesday, September 30, on B3.

“This is the result of a job well done, showing the importance of how well-modeled projects will attract new and important investments to Brazil. This is the first of them. We are kicking off the start of the solution to Brazil’s problem with sanitation. Next in line is the state of Rio de Janeiro, followed by at least nine more projects currently on our schedule. We at BNDES are supporting the improvement of the country’s infrastructure, continuously opening the market to different competitors, both national and international, always focusing on the end user,” explains Fábio Abrahão, Director of Infrastructure, Concessions and PPPs.

“This number of proposals was not a surprise. It is the result of a process that was conducted with a lot of interaction with the market and society in general. We have been able to combine the objective of universalization of services in an acceptable timeframe with a contractual design that provides legal certainty to the investor and encourages the concessionaire to seek the most innovative and efficient operation possible. In the end, this will result on a more appropriate service provision for the population,” says Guilherme Albuquerque, head of the Department of Privatization and Structuring of Projects of BNDES.

The criterion for selecting the winning group will be the largest offer for the concession, with the minimum amount stipulated at R$ 15,125,000.00 (fifteen million, one hundred and twenty-five thousand reais). The winning consortium takes on the responsibility for the distribution of water and sewage collection for 1.5 million inhabitants in 13 cities in the Metropolitan Region of Maceió. To this end, the group shall invest R$ 2.6 billion in basic sanitation infrastructure over the 35-year contract – R$ 2 billion of this total in the first six years. The Sanitation Company of Alagoas (Casal), in turn, will continue to lead the water capture and treatment processes, as well as the sale of this treated water for the concessionaire to distribute to users.

“It’s been three years of hard work to get where we are. We are happy to see this project come at a decisive moment and that will certainly bring development to Alagoas,” added the Secretary of Finance of Alagoas, George Santoro.

The purpose of the concession is the universalization of water services in six years and of the access to the sewage network for 90% of people by the sixteenth year of contract. Currently, 89% of the population has access to treated water and only 27% have sewage treatment. The future concessionaire will also have to achieve several indicators of performance quality and efficiency in the provision of services, in addition to reducing water losses to a maximum of 25%. Today, the waste rate is 59%.

BNDES and sanitation – Access to basic sanitation is vital for health, quality of life and, above all, for people’s dignity. Sanitation is thus one of BNDES’s strategic targets for Brazilian development. Currently, the Bank’s portfolio already has projects to improve the provision of water and sewage services in at least nine Brazilian states, including Acre, Amapá, Ceará and Rio de Janeiro. The planned investments will be around R$ 50 billion, with direct benefit to over 30 million Brazilians.  

The regional concession project for water supply and sewage services in the Metropolitan Region of Maceió is the first to be tendered among a series of projects in the sanitation sector.  BNDES will act as a factory of projects and services to develop private solutions to public problems, structuring partnerships with the public sector, new investors and qualified operators.

About BNDES – Founded in 1952 and currently linked to the Ministry of Economy, BNDES is the main instrument of the Federal Government to promote long-term investments in the Brazilian economy. Its actions focus on socioenvironmental and economic impacts in Brazil. BNDES offers special conditions for micro-, small- and medium-sized enterprises, as well as social investment lines, directed at education and health, family agriculture, sanitation and urban transport. In crisis situations, BNDES acts in an anticyclical manner and assists in formulating solutions for resuming economic growth.