Companhia de Saneamento do Estado de São Paulo (Sabesp) will get a $600 million loan from the Inter-American Development Bank (IDB) to expand collection and treatment of wastewater that is drained into Tietê river in São Paulo, Brazil’s biggest city.
The IDB is helping the government in its plan to extend collection and treatment of wastewater to the entire population served by Sabesp before 2023, said Fernando Bretas, team leader for the project. The total cost of attaining this objective is estimated at 4.7 billion reais, or about US$2.6 billion.
The loan will finance public works to connect 200,000 residences to the sewerage system, which will benefit 800,000 people in the city. In addition, the IDB financing will support the construction of collector mains and interceptors and the upgrade and construction of several wastewater treatment plants.
'The IDB has been a long-time supporter of São Paulo’s efforts to provide potable water and sanitation to its population and, consequently, contributing to the clean up of the Tietê river, which plays a vital role in the city’s environment and public image,' said Bretas. “This loan represents an important contribution to the State’s effort to restore the Tietê river water quality.”
After works are completed, 84 percent of wastewater collected by the river will be treated, up from 66 percent today, reducing the organic load reaching the river.
The IDB loan, which will mature in 25 years, is denominated in U.S. dollars and its interest rate is based on the London Interbank Offered Rate (Libor). The loan has a six-year grace and disbursement periods.