Paraíba State Launches $575M Sanitation PPP Auction in Brazil
The government of Paraíba is set to auction a public-private partnership (PPP) contract worth approximately $575 million. The auction, organized by the state sanitation company Cagepa, is scheduled for March 31 at the São Paulo stock exchange, B3. Interested parties must submit their bids by March 26.
Details of the Sanitation PPP Auction
The PPP contract will focus on delivering universal sewage services to 85 municipalities in the Água e Esgoto microregions of Alto Piranhas and the Coast. This ambitious project will be offered as a single block and has a projected term of 25 years.
Importance of Sanitation Sector Reforms
This auction highlights the growing significance of the sanitation sector in Brazil, especially following the regulatory changes made in 2020. These reforms mandate local governments achieve near-complete water and sewage service coverage by 2033. Failure to meet these requirements could result in losing access to federal funds.
- Contract term: 25 years
- Projected investment: R$ 3 billion (US$ 575 million)
- Key regions: Alto Piranhas and Coast microregions
- Deadline for initial proposals: March 26
- Auction date: March 31
Investor Confidence in the Sector
The new regulatory framework has improved contract security, attracting interest from various investors. Thiago Bronzi, of asset manager Pátria Investimentos, noted their commitment to the sanitation sector has strengthened with the regulation, alleviating earlier concerns about instability and local authority reliability.
Pátria Investimentos recently entered the sanitation market, winning a concession contract in Pernambuco in December. The firm anticipates further opportunities, including upcoming contracts in other locations.
Upcoming Projects in Brazil’s Sanitation Sector
Additionally, other significant contracts are set to be auctioned throughout the year:
- Brusque, Santa Catarina: Public wastewater services contract, auction on February 27, total investment of approximately R$ 1.5 billion.
- Goiás: Saneago’s PPP auction with projected investments of R$ 6.2 billion, proposals due by March 18, 2026.
- Minas Gerais: Privatization of Copasa, expected share sale by April 2023.
The Paraíba PPP auction marks an essential step in transforming Brazil’s sanitation infrastructure. As investments and collaborations grow in the sector, the country moves closer to achieving mandatory service coverage goals.
