IDB Invest financing will permit improvements and the expansion in the sanitation services infrastructure for 15 municipalities in the Metropolitan Region of Recife by installing sewage treatment plants and pumping stations, increasing the number of residences connected to the sanitation system and adding approximately 440 km of new sewage collection pipeline, along with investments in improvements to existing sewage treatment plants. The financing includes portions of investments already made and yet to be made between 2013 and 2019 (“Cycle I”), as well as some of the investments that are to be made between 2019 and 2023 (“Cycle II”), under the Administrative Concession Contract signed in 2013 by BRK Ambiental – Região Metropolitana do Recife/Goiana SPE S.A. and Companhia Pernambucana de Saneamento S.A.
Total investment, which includes the Cycles I and II, amounts to R$1,245,000,000. It will be co-financed by IDB Invest through a 20-year long-term loan of up to R$342,000,000, by a loan now being negotiated with Banco do Nordeste do Brasil (BNB) of approximately R$634,500,000 for the same term, as well as a loan obtained in 2013 from Caixa Econômica Federal - using funds from the program Sanitation for All - in the amount of R$235,669,187.17, and sums from the Fundo de Desenvolvimento do Nordeste in the amount of R$415,582,562.52. The terms of the latter two loans are 23 years and 20 years, respectively.
This project is the first IDB Invest loan made for a sanitation concession in Brazil and will help increase sanitation coverage in the region from 30% to 90% over the next 20 years, thereby ensuring that ultimately 100% of the effluent collected in the served area will be treated, thus directly benefiting approximately four million people.