This phase of the project is aimed at improving access to sanitation in the region of São Paulo and contributing to the gradual recovery of the environmental conditions of the Tietê River with the expansion of the coverage of sewerage systems and wastewater treatment in the Metropolitan Region of São Paulo. The project includes the rehabilitation and expansion of the capacity of three existing wastewater treatment plants and the construction of a new one. In addition, 400,000 households will benefit from a new sewage connection thanks to the project.
The Tietê River’s source, being located approximately 100 km from the city of São Paulo, receives effluents from residents and industries at an early stage of its course, causing serious sanitary and environmental issues. Indeed, the river is highly polluted, resulting in the accumulation of nutriments such as phosphorus and nitrogen, toxic to the aquatic biodiversity.
The financial structure of this loan is the result of joint efforts of IDB Invest and PROPARCO to develop innovative solutions to support the water and sanitation sector in Brazil. In this structure, IDB Invest provides local currency solutions through its treasury capabilities in reais and PROPARCO bears half of the risk of the project. This solution is expected to unlock Development Financial Institutions’ potential by mobilizing their available resources in US Dollars and Euros to the local currency projects in our region.
The project, aligned with IDB Invest, proposes to improve quality of life for the population while tackling the crosscutting issues of climate change and social inequality by improving wastewater services. More specifically, the project, which is classified 97.7% climate finance and aligned with the Paris Agreement, brings both climate change mitigation and adaptation co-benefits. It should represent a reduction of 145,514[i] tons of CO² equivalent per year in greenhouse gas emissions, after 2027.
The Tietê River Clean-up Program was initiated by SABESP in 1995. It aims at improving environmental and sanitary conditions in the Upper Tietê River watershed in the Metropolitan Region of São Paulo. Until now, the project contributed to improve access to sanitation services for approximately 12 million people, increasing sanitation coverage from 70% to over 90%. IBD Invest and PROPARCO’s financing will add to the success of the program by benefitting approximately 1.32 million people who will gain an access to a safely managed sanitation service. In addition to the above, all residents of the Upper Tietê River watershed (an estimated 22 million people) will be indirect beneficiaries, through improved environmental and sanitary conditions.
This transaction is expected to contribute to five United Nations’ Sustainable Development Goals (SDGs): “Good Health and Well-being” (SDG 3), “Decent Work and Economic Growth” (SDG 8), “Industry, Innovation and Infrastructure” (SDG 9), “Reduced Inequalities Sustainable Cities and Communities” (SDG 11) and “Climate Action” (SDG 13).
[i] This number is subject to upward or downward variations depending on methodological updates published by the IPCC – International Panel on Climate Change. For updated information about Sabesp's greenhouse gas emission inventories, see the Sustainability Reports at https://ri.sabesp.com.br/a-companhia/relatorio-de-sustentabilidade/.