Oct 20, 2020

 Sanitation company Aegea will be responsible for providing universal sewage services to 423,000 people in the municipalities of Cariacica and Viana, in Espirito Santo, for a period of up to ten years. The company was the winner of the concession process structured by the Brazilian Development Bank (BNDES) for implementing the public-private partnership (PPP) Cariacica. The auction took place today at B3. 

Seven consortia participated and Aegea offered a 38.13% discount on the sewage fee established in the public notice (R$ 1.60). The same discount will be applied to the monthly installment paid to the auction winner for providing the service. This is the second auction led by BNDES since the new Basic Sanitation Legal Landmark came into force on July 15, 2020. 

“I am happy as much with today's result as with the process. This is the second auction we do. We implemented a philosophy at BNDES for developing projects focused on three clients: the Brazilian population, the government and the investor market. Without them, there will be no sustainable solution over time to basic sanitation in Brazil,” explained the managing director of BNDES’s Infrastructure, Concessions and PPPs Division, Fábio Abrahão.  

Aegea is one of the largest private sector sanitation companies in the country, with 9 million clients in almost 60 Brazilian cities. Now, in partnership with Companhia Espírito-santense de Saneamento (Cesan), it will be responsible for expanding, maintaining and operating Cariacica's sanitary sewage system, in addition to treating waste from specific neighborhoods in the city of Viana. To this end, Aegea should invest a total of R$ 580 million in basic sanitation infrastructure over the 30-year contract, with R$ 180 million in the first five years. 

In a PPP, the concessionaire operates the service and receives at least part of its spread from the government. This is a different model from a simple concession, in which the winner of the bid is paid directly by the fees charged to consumers. In PPP Cariacica, for example, the client continues to pay for water and sewage services to Cesan, and Cesan will be responsible for paying the concessionaire for the contracted service.

"Today's result consolidates an important investment planning for the metropolitan region of Espírito Santo. Thanks to partnerships and concessions, the main cities in the state shows off high rates of access to basic sanitation. This is an extraordinary leap for the quality of life of the people of Espírito Santo," celebrated the governor of Espírito Santo, Renato Casagrande.

BNDES and Sanitation – The Cariacica administrative concession project is already the second to be tendered since the new Basic Sanitation Legal Landmark, sanctioned last July. On September 30, there was an auction for the concession of water supply and sewage services in the Metropolitan Region of Maceió won by BRK Ambiental, which faced six other consortia. The winner offered R$ 2.009 billion, which represented a premium of 13.180% in relation to the minimum amount stipulated for granting the service (R$ 15.125 million). 

By the end of 2021, BNDES intends to structure projects for basic sanitation in at least nine other Brazilian states, with planned investments in the order of R$ 50 billion, which will directly benefit more than 30 million Brazilians. BNDES will act as a project and service factory, structuring partnerships with the public sector, new investors and qualified operators, to develop private solutions to public issues. “There is a robust group of projects capable of arousing significant market interest. BNDES's mission is to open the market and promote competition," explained Abrahão.