Banco Nacional de Desenvolvimento Econômico e Social (BNDES) and Banco do Nordeste do Brasil (BNB) Financing the water sector in Brazil The responsibility for ensuring water service delivery lies with Municipalities, though they can share it with other municipalities and State government. They are responsible for selecting a service provider for the municipal area, and monitor its performance. They are also responsible for funding the expansion of services, in close coordination with funds coming from Federal and State government programmes. Brazil has a wide array of service provider options, the main ones being: 1) State Water and Sanitation Companies (utilities providing services to the urban areas of all (or most) municipalities in a particular State; 2) private utilities serving either a single or multiple municipalities; 3) public municipal service providers, some of which are professionalised, others not. The financial needs for investments in water supply and sanitation have been detailed in PLANSAB (National Basic Sanitation5 Plan). It differentiates between structural (i.e. infrastructure development) and structuring investments (i.e. investments into modernizing, reorganizing and improvement of the management) of service delivery. In its 2018 update, PLANSAB estimates total investment needs to be R$ 30 bn (USD 6 bn) per year until 2033. The main source of finance in the sector are: •
Tariffs. This is expected to be the main source of finance of the sector, as tariffs are expected to cover operational costs but also part of the investments.
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Public finance. The different types of service providers (empresas estaduais) and the various municipal and community service providers have access to public funding from Federal, State and Municipal governments.
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Repayable finance. Utilities can access loans in order to pre-finance investments, which later on are paid back from their tariff revenue.
Public Development Banks in the water sector in Brazil The Finance in Commons database has 21 domestic PDBs from Brazil. This includes 2 Federal level ones and 19 ones that serve one or more States. Out of the 21, 11 are identified as appearing to be active in water-related investments. This includes: 1) the Federal-level BNDES, 2) the Federally-owned but locally operating BNB and 3) some 9 State-level ones. This case study illustrates their role, by discussing BNDES and BNB.
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Basic sanitation in the Brazilian context refers to water supply, sanitation and wastewater treatment, solid waste and
stormwater drainage.
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