#1PANORAMA of the private sector's participation in sanitation 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL#2PANORAMA of the private sector's participation in sanitation. 2021 A new social and economic boundary abcon 25 sindcon years#3PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Letter to the Reader New times, new challenges We are publishing the eighth edition of the 'Panorama of the Private Sector's Participa- tion in Sanitation', one year to the day after approval of the Milestone for the sector, a major achievement of society, that dreams of having water distributed and adequately treated; and sewage services for all. In this edition we present: (a) a brief history of the passing of the Law; (b) the volume of investments needed for universalization; (c) public notices and bidding processes that have been keeping the market active; (d) a presentation on the different types of mod- eling of water and sewage services in mu- nicipalities and blocks of municipalities; (e) regionalization as a way of ensuring econ- omies of scale in provision of services; (f) figures and success stories regarding con- cessions operated by the private sector or in partnership with public companies. The private concession structure is shown through an overview of operations; we also dedicate a chapter to show that Brazilian sanitation shall be the largest environmen- tal programme under way in the world. The changes that have occurred since the approval of the Sanitation Milestone can be felt on every page. In this first Panorama after the basic sanita- tion milestone, we show data regarding a de- Happy reading! velopment still in its early stages, due to this highly significant change brought by Law 14,026/20. However, one can already see Percy Soares Neto the enthusiasm shown by private compa- nies for the development of a segment that has lacked significant investment for years. CEO of ABCON SINDCON 5#4PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Editorial Transforming the reality of the sector with legal certainty Panema da participaçã Passed into law about one year ago, the San- itation Legal Framework (Law 14,026/20) brings a tripod that shall be the starting points for a new direction for this sector: first, a process of regionalisation, which is currently under way; secondly, the effectu- ation of a declaration of financial and eco- nomic capacity, drawn up in May; and, last but not least, the regulatory agenda led by aneamento the Brazilian National Water and Basic San- itation Agency (Agência Nacional de Águas e Saneamento Básico - ANA), which is ex- tremely important for the segment in the long term. The main challenge faced by every seg- ment dealing with infrastructure is that of legal certainty for the investor. Legal cer- tainty depends on a stable quality regula- tory environment throughout the period of It is also important to highlight the report the investment. The consolidation of the new framework is a priority so that Brazil may handle these necessary investments, totalling some BRL 700 billion over the next 10 to 15 years, for the universalisation of services. It is in this scenario that ABCON SINDCON publishes a new edition of the Panorama of Private Participation in Sanitation. The main challenge that the association now faces is that of contributing to the transformation of this segment, which we believe is one of the most important locomotives that has been pulling the Brazilian economy along, in this period following the pandemic. This yearbook brings updated figures and data that shall be grounds for new studies and for decision-making by public manage- ment teams; institutions for nurturing and financing; suppliers of equipment and ser- vice providers. We are in need of good proj- ects, and good projects also require good studies and reliable data. contained in this Panorama, reporting on the progress that the private sector has shown in issues of key importance for society, such as dealing with environmental issues, ener- gy efficiency, and the disposal of the sludge resulting from sewage treatment. Within the whole infrastructure sector, sani- tation is probably the area that has had the greatest social and environmental impact, as we now face a target of universal sup- ply, as already achieved in other segments such as telecommunications and energy. The Sanitation Legal Framework is therefore a cornerstone within this future that we de- sire for the segment and for the country. In addition, ABCON SINDCON follows its path, getting consolidated as a reference within the debate and construction of an enhance- ment of public sanitation policies and for all those wishing to get to know this sector. Teresa Vernaglia President of the Board of Directors of AB- CON SINDCON since July 2021 7#5PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 The dawn of a new era in sanitation A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL 3 PREMIO SUSTENTABILIDADE 2019 It took 25 years for the current Regulatory Framework for Sanitation to be approved after the enactment of Law 8,987, which in 1995, for the very first time, allowed pri- vate contracts lasting more than five years in Brazil. This was essential so that the concession contracts - including those for water and sewage services - could be fea- sible, due to their characteristic of having long-term return on investment. The Brazilian population spent all this time without getting any universalized services of high-quality drinking water, and sewage collection and treatment, all essential to their health, improvement of quality of life, and well-being. During this time, ABCON SINDCON has battled on all fronts to reverse this calam- itous situation, seeking to stop intentions aiming at maintaining the status quo of inefficiency, to the detriment of each citi- zen's constitutional right to water supply and sewage services. The "Programme Contracts" were finally for- bidden and the municipal ownership of wa- ter and sewage services was confirmed. In addition, regionalized provision of services was encouraged, including in municipalities of local interest, thereby making sure of fea- sibility and legal certainty so that new bid- ding processes could take place, without the exclusion of smaller municipalities and/or those that would not be feasible in isolation. Under a new name, the National Water and Sanitation Agency (ANA) has obtained fed- eral regulation status, as sought for many years, considering the subnational nature of this market. We have also had the preparation of reg- ulatory decrees with regard to this new framework, including the one dealing with the Economic and Financial Capacity of service providers. Legal Certainty has been established, this being something that investors and private operators had been seeking in Brazil for over two decades. With the auctions of Casal, Cesan (Cariac- ica), Sanesul and Cedae, as well as those already being considered by the BNDES, the private market will have grown, in two years, more than it grew in 25 years. The population is to benefit and shall re- ceive, after free competition, quality ser- vices that are both regulated and efficient; this shall be achieved through contracts based on strict targets, and tariffs compat- ible with the users' ability to pay, including plans for a system of social tariffs for those people who need this. If we had to sum it up in one word, we could call it CITIZENSHIP, where the right to san- itation is observed in line with the terms of the 1988 Brazilian Federal Constitution, and shall be accessed by all, indiscriminately. The new law, through an entrenchment Carlos Henrique da Cruz Lima clause, also requires universalization of ser- vices (99% for drinking water and 90% for sewage collection and treatment) by 2033. Chairperson of the Board of Directors of ABCON SINDCON from July 2019 to June 2021. 9#6PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 10 CHANGE HAS ALREADY STARTED HEADING TOWARDS UNIVERSALIZATION THE ROLE OF SANITATION IN THE ECONOMIC REBOUND THE FUTURE OF SANITATION THE PRIVATE SECTOR EXPERIENCE A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL 12 24 38 38 56 56 66 CONCESSION 84 MODELS THE LARGEST ENVIRONMENTAL 98 PROGRAMME IN THE COUNTRY CONCESSION FRAMEWORK 114 ABOUT ABCON 130 SINDCON 11#7CHANGE HAS ALREADY STARTED Next steps towards the implementation of the new milestone#8PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 The three pillars of the milestone A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL With the approval of the new sanitation session held on 24 June 2020, and the re- sulting approval of the text of Law 14,026 by the Executive on 15 July of that same year, the basic principles to be followed for the country to move away from the bottom of the world ranking were established. milestone by the National Congress, at a Law 14,026/2020 suggests a structured path for the sector, anchored on three major pillars: (a) better regulation; (b) more com- petition; and (c) generation of improved economies of scale in the provision of ser- vices. These pillars seek the universaliza- tion of sanitation services. The best regulation will result from the per- formance of the National Water and Sani- tation Agency (ANA) by editing the sector's reference standards while giving support to subnational regulators. If well structured, agile and effective, ANA will increase insti- tutional stability, a key aspect for attraction of investments and to protect users of san- itation services. The competition will promote efficiency and greater market openness to new operators, enabling the necessary in- vestments for universaliza- tion and promoting greater quality of services provided to the population. The incentive for competition is introduced with the end of programme contracts - the approval of the Executive's ban in the text of Law 14,026/2020, on 17 March 2021, confirmed that programme contracts for the provision of public sanitation services cannot be renewed, and irregular contracts (expired or non-existent delegation, or in disagreement with legal requirements) are considered precarious. In such cases, the provision of water supply and sewage ser- vices will be subject to a bidding process whenever the service is not provided direct- ly by the holder. Bidding processes and/or auctions of pub- lic utility services such as sanitation can take part in the following ways: • ⋅ By greatest grant (goodwill): the company holding the qualification requirements as set out in the Call for Tender that offers the highest bid in relation to the minimum grant amount is considered the winner of the auction. By the lowest tariff (negative goodwill): the auction is won by the company that has the qualification requirements as set out in the Invitation to Bid, that presents the lowest price to be charged to the users. Or by a hybrid model that combines the two factors. The generation of economies of scale in provision of ser- vices is necessary so that those municipalities less at- tractive from the technical and economic points of view may benefit from the expan- sion of water and sewage services, as now expected with the new milestone. The provision of services, as regionalised through grouping of municipalities, is set forth in Law 14,026/2020 and opens the way so that the sector may, in an organized and effective way, enjoy the benefits of gain in scale, making it feasible to practice cross-subsidy. Thus, it is possible to guar- antee sanitation services, also in those lo- cations with poorer economic potential, or those with geographical conditions or avail- ability of water that are unfavorable for the profitability of the service (please read item 1.2, on regionalization, as below). 14 15#9PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL TABLE 1 The changes of the sanitation milestone How did it use to be? Programme contracts - executed and renewed among states and municipalities, without the need for bidding. With Law 14,026/20 Concession Contracts - prior bidding, open to public and private operators. Regulation - diffuse and without national issuing reference standards for regulation guidelines. Regulation with ANA reference standards the agency is now responsible for throughout the country, the compliance with which being a requirement for access to onerous and non-onerous capital of the Union for sanitation. Laws amended with the new sanitation milestone Law 11,445/07 Law 13,089/15 (Statute of the Metropolis) Law 11,107/05 Law 9,984/00 Law 13,529/17 Law 10,768/03 Former milestone of the sector Amended to extend its scope of application to regional units Amended to forbid the provision of sanitation services by programme contract Amended to assign new powers to ANA Amended to allow the Union to participate in the fund for the sole purpose of financing specialized technical services. Amended to enter the name and assigned responsibilities of the post of water resources specialist GRAPH 1 Chronology of Law 14,026/20 1 16 16 2 3 4 5 17 13 10.09.19 Rapporteur Geninho Zuliani (DEM-SP) presents to the Special Committee of the Chamber an opinion on Bill 3,261/19. The Commission held 16 public hearings. The text would be approved by the Commission on 30.10.19. 12.17.19 The text was ap- proved in the Plena- ry of the Chamber of Deputies and sent to the Federal Senate. 06.24.20 Detached from PLS 4,162/19, the new milestone is also ap- proved by the Senate plenary and forward- ed for presidential assent. 07.15.20 The President of the Republic grants assent to Law 14,026/2020, prohibiting programme contracts. 03.17.21 The House analyses and approves the presidential prohibi- tions (VET 30/2020) to Law 14,026/2020, which definitively puts an end to programme contracts and, among other measures, establishes 03.31.2022 as the deadline for the setting up of regional units by the states, in addition to the requirement of regionalization for access to onerous and non-onerous capital of the Union for sanitation.#10PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Challenges and deadlines for regionalization The challenge right now is that of ensuring the implementation of the regionalized pro- vision through mechanisms to encourage the grouping of municipalities within each state, respecting municipal ownership in case of local interest. Regionalized provi- sion does not mean the transfer of owner- ship to the states. by state governments in their territory. In states where there is no such arrangement promoted by local government, it will be up to the federal government to establish the reference blocks for regionalized provision. The Union is encouraging regionalization in the states. Other forms of associated management are also acceptable, for the characterization of regionalized provision, such as public con- sortia and associated management, both in current regulations. The transition so that the model evolves until we have all blocks defined has already compliance with the limits laid down in the begun, as the creation of re- gional units by the states. must take place by 15 July 2021, and the participation ― or not - of the municipali- ties in these units must take place by 31 March 2022, in compliance with the terms. set forth in Decree 10,588/20. By law, this is the deadline for formally open- ing regional units as may be established Regionalization aims to en- sure universal access to basic sanitation, even in the poorest areas, that cannot go without the provision of these essential services. The consolidation of regionalization, either through regional units or reference blocks, is a process that demands dialogue be- tween the state sphere and municipalities. This stage is under way across the country, and needs to move forward. Access to Federal resources Decree 10,588/2020 addresses the Techni- Therefore, where there is cal and Financial Support of the Union, as stated in Article 13 of Law 14,026/2020, the no regionalized provision. new milestone of the sector. It deals with up to 31 March 2022, there conditions for the allocation of federal pub- lic funds, whether onerous and not oner- will be no access to feder- ous capital, as stated in Article 50 of Law al resources and funding 11,445/2007, as well as technical support by the Union, with regard to sanitation, to states and municipalities, for the transition thereof to the regionalized model. with Federal resources or resources managed or op- erated by Union agencies or entities, with the restric- Among the conditions for access to oner- ous and non-onerous capital of the Union for sanitation, the new milestone for sani- tion remaining in force until tation included the need to be regionalized. the municipality adheres to Therefore, if the municipality does not join up with the regional unit or reference block to which it would be allocated, it will then be sanctioned with loss of access to fed- eral resources. As a rule for transition to the regionalized model, Decree 10,588/2020 set a deadline for municipalities to enter into regionalized provision, either through (i) participation in regional units, which must have been set up by the states no later than 15 July 2021; (ii) joining one of the reference blocks as already established by the Union, or (iii) for- malization of public consortia or associat- ed management instruments. some form of regionalization. As already mentioned in the previous section, any cities where the provision of ized have until 31 March 2022 to make the public sanitation service is not regional- transition to a regionalized model, whether by joining the regional units or blocks, cre- ated by the states and the Union, respec- tively, or through other existing associated management instruments (public consor- tia or cooperation agreements). Decree 10,588/2020 meets the reference standards to be established by the National Water and Sanitation Agency (ANA).Com- pliance with the reference standards is also a necessary condition for contribution of onerous (funding) and non-onerous feder- al public resources, as soon as such stan- dards are edited. 18 19 19#11PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL The rule for transition Concession and PPP contracts preceded by bidding or those that are the subject of studies already contracted by federal finan- cial institutions prior to the publication of Decree 10,588/2020 - will not be restricted to the allocation of federal public funds and financing arrangements using Federal re- sources if they do not make arrangements for regionalized provision. GRAPH 2 In these cases, restriction of access to oner- ous and non-onerous capital for sanitation remains in force until the aforesaid munic- ipality has been inserted in a regionalized provision. In other words, if the decision to join up with a regionalized structure occurs after 31 March 2022, the restriction shall be lifted and the municipality shall once again be eligible for the allocation of Federal re- sources for sanitation. Deadline for formal establishment of regionalized provision and its consequences From 03/31/2022 Municipalities that: • • • do not formally set up a regionalized structure for service provision; have no concession contracts or PPPs in place; or do not have a project with financial structuring by BNDES or FEP (Support Fund for the Structuring and Development of Concession Projects and Public- Private Partnerships of the Union, of the Caixa Econômica Federal) Will have NO access to onerous feder- al public resources (BNDES, CEF, etc.) and non-onerous resourc- es (like those from the Ministry of Re- gional Development). Important: The concession, PPP or financial structuring must have already been in progress on the date of publication of the Decree. Thus, if any municipality wants to perform a PPP on its own after the publication of the Decree, it will not have access to federal public resources as from April 2022. Modeling One of the guidelines for regionalization are If the targets cannot be met the so-called services of common interest, which imply infrastructure shared by two or within the new deadline, then more municipalities inserted in a metropoli- this regionalized provision is tan region, urban agglomeration or microre- gion. In these cases, participation is com- NOT FEASIBLE and needs to pulsory and the modeling of these blocks be restructured. needs to take into account the relations of interdependence among the municipalities. One example of regionalized modeling was the creation of blocks of municipalities by the BNDES for the Cedae auction in Rio de Janeiro, in which the participation of munic- ipalities was achieved through associated management instruments or the approval of the metropolitan body - in the case of the Metropolitan Region. To allow economies of scale, technical feasibility and economic at- tractiveness, the state was divided into four blocks of municipalities, with each of these blocks including a region of the capital. When studies for the bidding process for the provision of regionalized services sug- gest the economic and financial unfeasi- bility of universalization by 2033, the law allows targets to be postponed until 1 Jan- uary, 2040, provided prior consent has been granted by the regulatory body that, in its analysis, should observe the principle of sliding scale tariffs. As set out in Decree 10,588/2020, the Union may provide technical and financial sup- port for the transition to the regionalized provision model, provided service holders comply with the steps provided for in Law 14,026/2020, as set out in Article 13. There is no established recipe for the mod- el based on regionalized service provision. Each location has its own characteristics and challenges that need to be well looked into. It is worth looking into good examples, such as the CEDAE project in the Greater Maceió Metropolitan Region, and other projects being structured by BNDES. In addition to technical and financial aspects, there are also political issues that need to be observed. Dialogue among public managers is key to the success of this model. 2 20 21#12PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 Proof of economic capacity A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Update of Decree 7,217/10 Another relevant standard to complement the regulation of the new sanitation frame- work is Decree 10,710/21. Published last May 31, it establishes the methodology for proving the economic and financial capac- ity of drinking water supply and/or sewage service operators to meet the universaliza- tion targets of the new legal framework for sanitation. All operators who provide their services based on pro- gramme contracts (Govern- ment operators), and provid- ers who have been through a tender process (private operators), and shall include targets for universalisation, shall prove their economic and financial capacity. In a first phase, an accounting analysis is performed, studying the financial situation of the company, based on the company's balance sheets for the last five years, tak- ing into account factors such as assets, li- abilities, income, and investment capacity, among others. The deadline for handing over the doc- uments for this first phase ends at the end of this year. By 31 March 2022 at the latest, the local regulatory agency must make a decision about the effectiveness of this documentary proof of satisfactory financial health. After this first filter, the companies must then show that they are able to finance and/ or pay the costs of future ventures, either using their own resources or using funds obtained through a financial institution. It shall also be necessary to come up with a feasibility study for universalisation and a plan for capture of investments so the tar- gets may be achieved. In this second phase, it shall be possible to apply regionalisation to contracts of con- cession and establish Special Purpose En- tities (SPEs) that are solid enough to take on the projects as established. One possi- bility is the establishment of closer partner- ships between public and private. The time frame for this second proof expires at the end of 2022. Decree 7,217, published on 21 June 2010, regulates Law 11,445/2007 and refers to the previous wording of the law. As the New Milestone for Sanitation has profoundly overhauled the legislation for the sector, the text that regulates it must also be updated. There are still some complementary reg- ulations: rules for interruption of services, the relationship of sanitation services with water resources, planning, reference stan- dards, social control, conditions of con- tracts' validity, among others. Other decrees of the legal framework of the milestone Created shortly after publication of Law 14,026/2020, through Executive Decree 10,430 of 20 July 2020, the CISB (Inter-min- isterial Committee on Environmental San- itation) has the aim of implementing the federal sanitation policy, articulating pub- lic agencies and state financial entities in development actions for the sector. One of the committee's tasks is to define the allo- cation of Federal resources for sanitation. The Committee is chaired by the Minister of Regional Development, and includes the Ministry of Economy, Civil Chief of Staff, and the sectors of Health, Environment and Tourism. 22 23#13HEADING TOWARDS UNIVERSALISATION#14PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 Sanitation today and the performance of private operations In general, the improvement of coverage provided by water and sewage services in Brazil has not been significant, and this re- flects the dearth of investments made in this sector over the last five years. If we make a comparison with the period been a slight fall in the provision of water services in urban areas (which dipped from 93.08% in 2015 to 92.95% in 2019) and a slight improvement in the percentage of ar- eas with treated sewage, with regard to the water consumed (42.67% in 2015, rising to 49.09% in 2019). between 2015 and 2019, we see there has Without the bases of a legal framework that would lead to competition, as is the case nowadays with the current Law No. 14,026/20, private enterprise had shown practically no change in its participation within this period, and now provides full or partial services, according to the model of concession that has been observed in each municipality, to 15% of the population (32.5 million people). However, even though they are present in only 7% of all municipalities, the private concessions in the sanitation sector already account for 33% of the total sum invest- ed by the companies of this segment. In 2019, there was a total investment of BRL 4.8 billion made by private com- panies, compared with a total investment of BRL 14.8 billion considering all operators. These investments are the result of 191 dif- ferent contracts that have been signed, rang- ing from full and partial concessions to PPPS and subdelegations, involving a total of 392 cities, of which 42% are considered small municipalities with up to 20 thousand people, and another 22% are municipalities with be- tween 20 thousand and 50 thousand people. The following are some successfully ex- amples of municipalities with concessions that are ensuring the universalization or have already achieved it. 26 26 GRAPH 3 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Evolution of water and sewage service coverage (%) Source: SNIS 2015-2019 93.08 92.96 92.98 92.78 92.85 Treated sewerage rate, considering consumed water Sewerage collection 83.30 83.30 83.50 83.70 83.60 rate 59.44 58.04 55.17 58.06 57.02 49.09 42.67 44.92 46.00 46.25 2015 2016 2017 2018 2019 Rate of general water supply services Rate of urban water supply services GRAPH 4 Population served by private operators (%) Source: SPRIS Popula- tion served by private companies 31.6 million Total population of Brazil: 211.8 million 15% 27#15PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 GRAPH 6 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Track record of investments made in the sector with emphasis on private investment (Considering total investment in the sector and total investments of operators in the sector) Source: SNIS e SPRIS Total investment in 15.6 the segment * 13.1 14.8 Total investments 11.4 11.5 made by the operators 10.9 12.3 in the segment 10.5 10.5 Total private investment ** 10.1 GRAPH 5 Participation of water and sewage service operators in Brazilian municipalities, by type of operator (%) Source: SNIS 2019 - Série Histórica - Informações Desagregadas. SPRIS 2019. * There are municipalities that have more than one operator. Indirect forms of services provided by companies (PPPS, sub-delegations and asset leases) have been considered. Considering the above information, the percentages amount will not be 100%. **For the calculation of private participation in Brazilian municipalities, the 2020 and 2021 contracts were consid- ered. Thus, we had 98 new municipalities, representing 7% of all municipalities in 2021. 28 State companies 70% Private companies Municipal services 26% 7% 33% (*) The total investment by con- tractor, based on the SNIS subcat- egories, includes investments made by the service providers, by municipalities, and by states. (**) The percentage investment by pri- vate enterprise, as here present- ed, refers to the total invested by operators in the segment. 21% 23% 22% 20% 2.4 2.3 2.0 2.5 4.8 2015 2016 2017 2018 2019 Even though they correspond to only 7% of municipalities, private concessions in the sanitation sector account for 33% of the total sum invested by operators in this sector. These are solid investments, based on contracts with established goals and targets. PRIVATE SECTOR 7% 33% municipalities investments 29 29#16PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL GRAPH 7 Increase in the number of municipalities and contracts with the private sector in sanitation Source: SPRIS Contracts 261 245 226 389 174 Municipalities 139 148 148 81 94 94 105 112 132 113 96 20 14 7 270 70 79 54 56 29 29 42 94 96 98 00 02 04 ☐ 1 1 1 06 08 10 12 14 ☐ 16 1 GRAPH 8 Municipalities with private sector participation, by population Source: SNIS and SPRIS 2019 Over 200 thousand Between 50 people 14% and 200 thou- sand people 22% 389 municipalities Between 20 and 50 thou- sand people 22% 191 18 20 Up to 20 thousand people 42% The private sector in sanitation: Investments are a priority (cases) Municipalities with investments assured for universalization Caçador (SC) Full concession Just over two years ago, BRK Ambiental started their operations in order to solve the chronic water shortage problem expe- rienced the residents of Caçador. With in- vestments expected to be around BRL 220 million, by 2024 the company will have allo- cated BRL 73.6 million to ensure sanitation services, contributing to the improvement of health and quality of life for the 80,000 or so people who live in the municipality. In the company's first years of operation, there was a task force set up to solve recur- rent interruptions in the water supply. New pumping stations were installed and the existing ones were restructured. The plants for collection and treatment of raw water were expanded and modernized. In addition, a new main-pipe of 1,500 meters, with a di- ameter of 300 millimeters, was installed to benefit one of the most critical sectors, the eastern part of the municipality. Since then, about 10,000 inhabitants have started to receive water in their taps. The concession- aire is now investing in the sectorization of water distribution and intensifying the fight against fraud, as well as continuing with the plan to modernize the production and distri- bution of treated water in the municipality. The company now starts to invest in the expansion of the sewage services system, promoting better health and quality of life for the population, and ensuring the preser- vation of rivers and streams. 30 31#17PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 Casa Branca (SP) Full Concession A new sewage treatment plant, inaugurated in 2020, now benefits nearly 2,000 inhabi- tants in a district of the city. The 'Águas de Casa Branca' concessionaire (Terracom Sa- neamento) took over the concession in 2018 and brought the investment forward. This investment came to BRL 1 million, for the Venda Branca STP, and was penciled in to start only in 2028. With the arrival of the new operation, all sewage started to be treated. In 2019, the water treatment station, which had already been reopened, underwent im- provements and modernization to ensure the supply of water to the local population. The concessionaire works towards the uni- versalization of sanitation in Casa Branca, to make the city a reference benchmark in the sector. Paraibuna (SP) Full Concession Since taking over the sanitation services of the municipality, in 2017, CAEPA, a conces- sionaire of the GS Inima Group, has priori- tized the modernization of the water supply system, including the replacement of the network in the city centre, installed more than 60 years ago, and implementation of the sanitary sewer system. The total investment planned for the mu- nicipality is BRL 20.5 million, to be invested over a 30-year concession period. A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Paraíba do Sul (RJ) Full Concession The 'Águas do Condessa' concessionaire, part of the Águas do Brasil Group, offi- cially started activities in the municipality of 44,000 inhabitants in December 2020, seeking to lower price levels and solve the issues related to interrupted services no longer available to the population. The investment is approximately BRL 85 million for 35 years of concession, with BRL 24 million due to be invested over the next five years. For the sewage collection and treatment system, which currently does not exist, the concessionaire will progress to coverage of 25% of the city's properties in the first five years, contributing to the qual- ity of life of the population and preserving the environment, from the protection of the basin of the Paraíba do Sul, the region's main source of water. Paranaguá (PR) Full Concession In 2018, this municipality received a new sewage treatment plant (STP), serving 18 neighborhoods, with about 40 thousand residents. With the new station, the Para- naguá Saneamento concessionaire, of the Group, increased the coverage of effluent treatment from 70% to 90%. This indicator shows us that Paranaguá has made the list of the most sanitized cities in Brazil. The investment was BRL 47.8 million. This amount includes not only the construction of the sewage treatment plant, but also the implementation of 18 sewage pumping sta- tions and 7,500 connections of household networks. There was also the addition of 72,000 meters of collection systems and an outflow sewage system (a pipe that trans- ports the treated effluent to a release point in the river) with 2,000 meters of extension were installed. The concessionaire has also pointed out several areas of progress in their manage- ment period. To ensure the regular supply of the Ilha do Mel seaside resort during the period of overcrowding, at the start of last year the company invested BRL 500,000 in the implementation of flexible tanks, in- stalled close to the beach to enable supply by barges, and this contributed to the in- creased water availability without affecting the catchment systems of the city. 32 33#18PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Rio Claro (SP) PPP Sewage With almost 210,000 inhabitants, the city stands out as a reference benchmark when expansion of sewage services is concerned. In just 10 years, the treatment rate soared from 11% (before the concession of the ser- vices) to 92%. Universalisation - full service coverage is planned for next year (2022). In 2007, BRK Ambiental took over the man- agement of sewage collection, remov- al, treatment and final disposal services and made investments in complementary works, adaptation and modernization of the system. Currently, the sewage treat- ment capacity is 1.3 million m 3 per month, equivalent to an average of 500 liters per second in 2021. Investments for sewage treatment have already exceeded BRL 309 million over 13 years of concession, having an impact upon quality of life and positive effects on public health and on the environment. With efficient sewage treatment, Rio Claro has depolluted its main rivers and streams. In fact, the city was included in the list of Brazilian munici- palities with best results in sanitation. Last year, Rio Claro was listed in the annu- al ranking of Universalization of Sanitation, published by the Brazilian Association of Sanitary and Environmental Engineering (ABES), in the "Towards Universalization" category, having the highest score. Also in 2020, the city stood out and ranked second in the Sanitation and Environment category of the Municipalities' Competitivity Ranking, first published by the Centre for Public Lead- ership (CLP) due to the depollution of rivers. Santa Rita do Passa Quatro (SP) Full Concession In just five years of operation, the sewage collection and treatment rate in the urban area of the municipality, located in the Mo- gi-Guaçu hydrographic basin, rose from 36% to 100% of the population, while the treated water loss rate took a tumble from 61% to 26%. Controlled by GS Inima Brasil, Said and Enor- sul, the Comasa concessionaire has invest- ed in the modernization of the water sup- ply system based on water obtained from the Passa Quatro and São Valentim rivers; in new surface wells and artesian wells for water harnessing, pumping stations and optimization of the sanitary sewer system that serves the municipality's 25,000 inhab- itants. Comasa started its operations in the municipality in 2016, and will serve the pop- ulation of 25 thousand, until the year 2046. Municipalities that have already achieved universalization 34 A study released by the Brazilian Associ- ation of Sanitary and Environmental Engi- neering (ABES) in June 2020 showed that only 98 cities in the country are in the stage called "working towards universalization". These include municipalities that have re- lied on private concessionaires for over a decade and are now reaping the benefits of their solid investments made to improve the water supply and sewage collection and treatment services for the population. These are investments that directly affect the quality of life, by ensuring access to drinking water, with regularity and quality, in addition to a sanitary sewer services sys- tem, which prevents disease while preserv- ing the environment. We now show two examples of this evolution: 35#19PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Cachoeiro de Itapemirim (ES) Full Concession This is one of the first municipalities in the country to assign the management of water and sewage services to the private sector, in 1998. Since the beginning of the conces- sion, over BRL 429 million have been invest- ed in works, expansion, improvements and modernization of services. Today, the city is below the national average of losses, with 22.51%. Before the concession, the cover- age of the treated water network in the urban area was 87%, while losses exceeded 56%. Only 5% of the houses in the urban area had sanitary sewage systems. The sewage treat- ment system was non-existent, while some 21 million liters of sewage were poured into the Itapemirim River every day. Today, some 193,000 inhabitants in the ur- ban area of the municipality have sewage collection service. Of the total sewage col- lected, 98.15% is treated. The treated water supply reaches 100% of urban homes. Through a new amendment to the conces- sion contract, valid from May 2019, BRK Ambiental began to serve communities out- side the urban perimeter. Until then, these communities did not have water supply services, water being supplied exclusive- ly by water tankers. In total, 24 kilometers of water and sewage networks were built to connect these communities with public sewage lines. In 2012, the concessionaire made itself self-sustaining in energy after the con- struction of the Small Hydro Power Plant - PCH Ilha da Luz at WTP João Goulart, ensuring the system's energy and opera- tional efficiency. The concessionaire maintains a new in- vestment programme, which began in 2018 and will run until 2022, providing for the modernization and expansion of the water supply and sanitary sewer systems in all neighborhoods and districts of the municipality, the total investment coming to BRL 30 million. This March, it was re- certified based on the standards and re- quirements of: ISO 14001:2015 (Environ- mental Management Systems) and ISO 9001:2015 (Quality Management System) for a new three-year cycle, in addition to being certified to ISO 45001:2018 (Inter- national Standard for Occupational Health and Safety Management System) which focuses on improving performance in terms of Occupational Health and Safety. Ribeirão Preto (SP) Sewage Concession In 1995, sewage concessionaire GS Inima Ambient became the manager of sewage treatment in the city that, at the time, had 450,000 inhabitants (and just 2% of domes- tic sewage treatment, through a treatment pond in the district of Bonfim Paulista). With a current population of about 700 thou- sand and with a sewage network covering 98% of the municipality, Ribeirão Preto is in two different rankings of best cities for san- itation in Brazil: that of the ABES and that of the 'Trata Brasil' Institute. With the uni- versalization of sewage treatment, the con- cessionaire also ensured the clean-up of the Pardo River watershed. The company is re- sponsible for the revitalization of waterways in the region, which, until 2002, received dis- charge volumes equivalent to a daily load of 27 tonnes of raw organic matter. In 2011, the concessionaire also became the first company in the country to implement a biogas power generation system using sludge from the sewage treatment process. The project is doubly ecological because it also extracts biogas to be burnt as fuel. This prevents direct emission into the at- mosphere, thereby minimizing the emis- sion of greenhouse gases. It is a renewable, clean and responsible source of energy, which accounts for some 60% of the ener- gy needed for the operation of the sewage treatment plant. The daily volume of biogas comes to about 7,000 m3, which allows the production of 15,000 kWh/day, thereby making sure of the energy efficiency of STP Ribeirão Preto. 36 37#20THE ROLE OF SANITATION IN THE ECONOMIC REBOUND#21PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL The path of sanitation development to- wards universalization has been a long one. However, since 15 July 2020, when Law 14,026/2020 was passed and published, with a new sanitation milestone, compa- nies operating in the sector have got an im- portant ally. Achieving universalization of water and sew- age services in the country in the medium term has become much more tangible as, after three decades of delay and three years of discussion in Brasilia, a new reality for the sanitation sector is now being constructed. Sanitation has become a priority. The change that will increase the sector's investments is under way. There is a frontier to be explored, and the private sector will play a key role in this effort for universalization. Today, considering the recent auctions of Casal, Sanesul, Cariacica and Cedae, pri- vate operators directly or indirectly serve 17% of the population. We expect them to reach at least 40% by 2030. The impact of this long-awaited evolution of sanitation will have an important effect upon the economy. The sector will drive the country's economic recovery after the health crisis, in job creation and in investments. GRAPH 9 Investment provided for by the National Sanitation Plan Basic (Plansab) X Investment made Source: Plansab e SNIS 38% Investments Made BRL 29 billion Planned investments that were not made BRL 44 billion Total investments forecast for 2018 and 2019, in order to reach universalisation in 2033, according to Plansab: BRL 77 billion GRAPH 10 Evolution of investments (BRL billion) x GDP growth (%) - 2003 to 2019 The challenge of universalization Service deficit to the Scarcity of population The shortage of sanitation services is grave: it affects some 48% of the popula- tion, which works out at 101 million people, who do not have sewage coverage, and 16% who do not have water supply. This means that some 34 million people do not have drinking water in their taps, according to a study conducted by KPMG 1 study in partnership with ABCON SINDCON. investments The KPMG/ABCON SINDCON study points out that the recent investments made in sanitation were not enough to meet the goals set by Plansab - National Sanitation Plan, which means less coverage and fewer work projects, thereby generating a deficit that accumulates over time. (1) How much does it cost to universalize sanitation in Brazil, updated version, 2021 40 Source: SNIS and IBGE 5.8 4.0 3.2 7.5 GDP change Investment 6.1 15.6 5.1 14.4 12.8/13.0 4.0 11.7 12.6 12.8 3.0 13.0 3.5 13.1 11.5 11.0 1.9 1.0 1.3 1.1 0.5 9.0 1.1 8.6 7.4 6.7 7.0 6.2 -0.1 -3.6 n 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Distribution of Investments Made between 2003 and 2019, by Brazilian regions CO S 9% 15% SE 54% NE 18% N 4% 41#22PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Demand for investment Also according to the study by KPMG/ ABCON SINDCON, the public and private sectors need to work together to invest more than BRL 753 billion in about 12 years, in order to expand water supply and sani- tary sewage systems and cover deprecia- tion, aiming at universalization of services. Of this total, BRL 255 billion refers to the re- covery of depreciation of existing networks and assets. GRAPH 12 Population served by water and sewage services (millions of inhabitants) Source: IBGE and SNIS Population with water supply 170.8 GRAPH 11 Estimated investments for universalisation Source: KPMG / ABCON SINDCON BRL 753 billion in invest- ments through to 2033 BRL 498 BRL 255 billion for network expansion billion in de- preciation Population with sewage collection 110.3 Total population of Brazil: 211.8 million Current investment scenario and regional projections BRL 498 billion for network expan- sion, segmented by region SE 176 N 46 BRL 498 billion for network expansion, segmented by type of service Esgoto 354 BRL 354 billion for sewage, segmented by region NE 93 SE 119 BRL 144 billion, segmented by region. SE 939 56 S N NE 136 70 13 S CO CO 52 Áqua N 89 39 144 32 CO S 13 18 38 83 NE 43 The moment is one of significant national visibility for the sector. This increases the need for long-term investments, which in sanitation is a 'win-win' situation, with nu- merous positive impacts for society and the environment. Due to its capillarity, this sector has a rele- vant production chain with a potential mul- tiplier that directly benefits the local popu- lation economically. Both civil construction and the machinery and equipment manu- facturing industry, the main industrial sec- tors impacted by investments in sanitation, hire local labor and generate direct income to the municipalities where they operate. The investment pipeline of the Brazilian De- velopment Bank (BNDES) alone includes six concession projects or Public-Private Part- nerships (PPPs) for water supply and sani- tary sewage system throughout the country, giving a total of investment of BRL 16 billion. Considering this sheer potential and the urgent need for investment, the sanitation sector appears, as from the milestone, as the most robust source of economic recov- ery for the country after the pandemic. 42 33 43#23PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 Multiplier effect of investments The water supply and sewage collection and treatment sector has an economic multipli- er effect of 2.8. This value does not consider health savings, which would exceed BRL 5.9 billion with universalization of services, as more than 350,000 hospital admissions are recorded on average per year for diseases linked to inadequate sanitation². Universalization will bring relevant impacts to a huge production chain, generating jobs throughout this network. Regional needs We now present analyses of regional im- pacts of expansion of investment in sani- tation, according to data compiled in the study much does it cost to universalize san- itation in Brazil (KPMG/ABCON SINDCON). GRAPH 13 Multiplier effect of Investments in sanitation Source: Trata Brasil, ABCON SINDCON and Exante² BRL 1.00 BRL 2.80 Invested in sanitation Impact on the economy A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL GRAPH 14 Investments needed by region in Brazil 2018-2033 (BRL billion)* Source: KPMG Study / ABCON SINDCON North BRL 45.6 billion MW 10% N 9% SE 35% S 18% NE 27% Mid-west BRL 51.7 billion Northeast BRL 135.8 billion Southeast BRL 176.0 billion (2) Economic and Social Benefits of the Development of Sanitation in Brazil, Trata Brasil Institute/ABCON/Exante, 2018. * Amount required for network expansion. Does not consider the value necessary for recovery of depreciation. Note: Rounding can lead to 1 percentage point variations, for more or less. South BRL 88.6 billion 44 5 45#24PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 North The Northern region is considered the re- gion most in need of sanitation services, and accounts for 9% of the new invest- ments. The states of Amazonas and Pará need more resources to reach their targets (BRL 10 billion and BRL 17 billion, respec- tively). The resulting positive effects thus generated come to about three times the amount of new investments. Universalization depends on the cost veri- fication of several components that struc- ture the provision of the service. In the case of the Northern region, the most significant costs for the water supply are related to distribution networks and main-pipes. Sewage services have costs two and a half times higher than water. These expenses are mainly related to collection networks and sewage treatment plants (STPs). The States of Amazonas and Pará are the ones needing heaviest investments in this area. Northeast A challenge in itself, the Northeast is the re- gion needing the most investments. Bahia is the Northeastern state with the highest demand for investments for the universalization of these services, followed by Ceará.Sergipe has the lowest demand for investments, working out at only 4% of the total for of the region. The most representative components in supply costs are water distribution net- works (26%) and main-pipes (24%). The highest demand in the Northeast refers to investments in cisterns. GRAPH 15 Investments in the Northern region 2018-2033 (BRL billion)* Source: KPMG Study / ABCON SINDCON RR BRL 1.6 bi AP BRL 2.0 bi AM BRL 10.5 bi AC BRL 1.7 bi North BRL 46 billion RO BRL 5.9 bi PA BRL 17.8 bi * Amount required for network expansion. Does not consider the value necessary for recovery of depreciation. Note: Rounding can lead to 1 percentage point variations, for more or less. 46 ΤΟ BRL 6.0 bi A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL GRAPH 16 Investments in the Northeast region 2018-2033 (BRL billion)* Source: KPMG Study / ABCON SINDCON CE BRL 23.4 bi RN BRL 9.3 bi MA BRL 19.0 bi PB BRL 13.6 bi Northeast PI BRL 14.5 bi BRL 136 billion PE BRL 15.2 bi AL BRL 7.5 bi SE BA BRL 4.2 bi BRL 28.9 bi * Amount required for network expansion. Does not consider the value necessary for recovery of depreciation Note: Rounding can lead to 1 percentage point variations, for more or less. 47#25PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Midwest Because of higher levels of coverage, the region is the second in terms of investment needed for the universalization of sanitation services. Water services, for example, have coverage of 90% in the region and needs proportionally low investment needs - BRL 13 billion to universalize the service (simi- lar to that of the Northern region). Needs for investment are higher in the state of Goiás and in the Federal District. Regarding the investment needs for san- itary sewage systems, Goiás and Mato Grosso are the two states most in need. Needs are lowest in the Federal District, it having 85% of service coverage. GRAPH 17 Investments in the Midwest region 2018-2033 (BRL billion)* Source: KPMG Study / ABCON SINDCON Southeast Among the Southeastern states, there is the city of São Paulo, capital of the state with the same name and the most popu- lous city in Brazil, which has the highest rates of water and sewage coverage (96% and 89%, respectively) and higher external- ities (economic, social and environmental impacts) generated by investments. The investment needs for universalization in absolute values is greater than that found throughout the Northern region, especial- ly because the Southeast has the largest population in the country. The externalities of the region are also the largest to be obtained, reaching a level of more than twice the total investment. The investment needed for the universal- ization of water service in the Southeast correspond to 39% of the total investment needed for the country. All its items - except artesian wells and cisterns - have the high- est demand for resources when compared to other regions. The State of Espírito San- to has the smallest needs for investment, while São Paulo stands out with the larg- est. In terms of the amount of resources, the path trailed by the region is possibly the most challenging. Investment for the universalization of sew- age systems in the Southeast represent 34% of the total cost for the country. The greatest needs are mainly in São Paulo, due to its investment demands. GRAPH 18 Investments in the Southeast region 2018-2033 (BRL billion)* Source: KPMG Study / ABCON SINDCON MG BRL 46.6 bi MT BRL 17.0 bi GO BRL 24.0 bi Midwest BRL 52 billion MS BRL 7.9 bi * Amount required for network expansion. Does not consider the value necessary for recovery of depreciation. Note: Rounding can lead to 1 percentage point variations, for more or less. 48 DF BRL 2.7 bi SP BRL 69.6 bi Southeast BRL 176 billion ES BRL 9.6 bi RJ BRL 50.1 bi * Amount required for network expansion. Does not consider the value necessary for recovery of depreciation. Note: Rounding can lead to 1 percentage point variations, for more or less. 49#26PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL South This is the third region with most investment needs in order to universalize sanitation. The state with greatest need is Rio Grande do Sul. Paraná is the one with the lowest fi- nancial needs. Strangely enough, this state has more externalities than other states in the region, and also shows the coverage rate for water and sewage service. The total externalities generated are almost twice the total investment. Despite the low coverage and great investment needs, the universalization of sewage services in the South region would come before the univer- salization of water services, as these would have a demand which is only a quarter of that of sanitary sewage systems, and great- er coverage (89% of the Southern popula- tion is already served by water systems). The investment needs for water services in the Southern region accounts for 13% of the total national costs, more than the North and Midwest regions. The sewage collection network represents the most costly component of the total in- vestment needs (60%). As the third most populous region, water service costs in the Southern region account for 20% of the to- tal national cost of universalization. GRAPH 19 Investments in the Southern region 2018-2033 (BRL billion)* Source: KPMG Study / ABCON SINDCON PR BRL 13.3 bi South BRL 89 billion SC BRL 30.4 bi RS BRL 44.9 bi Application of resources x Impacts on society More than just taking treated water out to the population, collecting and treating sewage in cities, investments in sanitation services represent benefits for society in many aspects. In addition to generating income and creating jobs, the results are reflected in people's lives. Treated water and sewage mean better health and better education indicators. This social and environmental impact is recognized worldwide. However, we cannot play down the economic impact in the sec- tor, with job creation and income. This fact needs to be highlighted, especially in the current situation marked by a resumption of economic growth. According to a survey by ABCON SINDCON based on data from the System of National Accounts (IBGE), and included in the con- juncture analysis Impact of investments in water and sewage supply in the sector's production chain (ABCON SINDCON, Octo- ber, 2020), the sewage supply, collection and treatment sector represents about 0.58% of GDP (BRL 40 billion). In addition to the scope for job creation, in- vestments in sanitation generate impacts in a long production chain, such as in the manufacture of metal products with the production of metal reservoirs and pipes, which, in turn, will bring additional demand for the steel and aluminium industry. There is also increased demand for the pro- duction of plastic and rubber products, such as pipes and valves, as well as additional de- mand for the non-metallic materials industry that produces cement and concrete. Another relevant sector is the electron- ics industry, with the demand for control boards, automation, installation materials and telemetering. In a nutshell, there is an extremely relevant production chain that is activated when investing in water supply and sewage treatment. Based on the Input-Output Model method- ology, it is possible to forecast the impact on the economy when considering the total investment provided for the universalization of water and sewage services in the country. Considering the investment of about BRL 498 billion for the expansion of water sup- ply and sanitary sewer systems, one can observe a significant impact on the Brazil- ian economy. The multiplier effect would in- ject about BRL 1.4 trillion into the economy, with the generation of more than 14 million jobs over the investment period and almost BRL 90 billion in tax collected. * Amount required for network expansion. Does not consider the value necessary for recovery of depreciation. Note: Rounding can lead to 1 percentage point variations, for more or less. 50 51 55#27PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 When analysing the economy as a whole, it is possible to observe three types of effect: A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL TABLE 2 Impact on the economy with total investment for universalisation Direct Effect: shock or initial vari- ation of production. Indirect Effect: variations in the sectors that provide supplies to the sector that suffered the initial shock Income Effect: variation in payrolls caused by direct and indirect effects, changing the consumption habits of families and the sectors that serve them. Total GRAPH 20 Impact on the economy with total investment for universalisation Source: ABCON SINDCON 52 52 BRL 498 billion for investment BRL 498 billion in Direct Effect (final demand) BRL 379 billion in Indirect Effect (intermediary consumption) mediário) BRL 1.4 trillion of current effects Source: ABCON SINDCON Production (BRL mil- lion) Total Agricultural Industrial Services Direct production Indirect production 1,419,011.6 498,000.0 379,155.3 Income effect 541,856.3 33,442.1 0.0 3,985.1 29,457.0 858,892.7 526,676.8 429,774.0 68,226.0 230,841.3 144,328.9 198,277.4 314,121.9 Employment (jobs) Total Agricultural Industrial Services Total Direct jobs 14,242,464 6,202,351 852,394 7,643,059 5,747,012 0 5,559,464 642,887 Indirect jobs 2,946,278 Income effect jobs 5,093,835 93,629 758,765 1,349,474 1,503,175 734,120 3,600,950 Salaries (BRL million) Total Agricultural Industrial Services Total Direct salaries Indirect salaries 239,796.4 84,626.3 65,529.8 Income-effect salaries 89,640.3 3,176.3 0.0 323.7 2,852.6 118,990,9 117,629.2 67,557.4 17,068.9 31,550.3 33,655.8 19,883.2 66,904.5 Taxes (BRL million) Total Total 88,629.5 ICMS* 28,188.3 2,935.4 57,505.9 *ICMS is a state value-added tax on services and circulation of goods. **IPI is a federal excise tax on the manufacturing of goods. BRL 542 billion in Income Effect (consumption of families)(consumo das famílias) IPI** Others 53#28PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL TABLE 3 Impacts on the civil construction and machinery and equipment sectors with the total investment for universalisation Source: ABCON SINDCON CIVIL CONSTRUCTION MACHINERY AND EQUIPMENT INDUSTRY Production (BRL million) Total Production (BRL million) Total Total 424,292.2 Total 42,442 Direct production 381,468.0 Direct production 25,398 Indirect production 40,941.4 Indirect production 12,720 Income effect 1,882.8 Income effect 4,324 Employment (jobs) Total Employment (jobs) Total Total 5,979,269 Total Direct jobs 5,375,776 Indirect jobs Income effect jobs 576,960 26,533 Direct jobs Indirect jobs Income effect jobs 38,002 12,783 129,021 78,236 Jobs in sight Sanitation auctions already held as from the validity of the new milestone, between the second half of 2020 and the first half of 2021, will guar- antee 700,000 direct and indirect jobs in the country, according to the Ministry of Economy. The estimated in- vestments are BRL 700 billion. In Rio de Janeiro alone, thanks to the Cedae concession, 400,000 direct and indirect jobs are estimated. Among the sectors that will benefit, and shall speed up the provi- sion of jobs, are civil construction, produc- tion of machinery, equipment and plastic materials, technology and services. As the concessionaires will be scattered through- out the state, there will be a large increase in local hirings. The most significant impact will be on civil construction. There will be an increase of about BRL 424 billion in the sector's pro- duction, generating almost 6 million jobs over the investment period. The machinery and equipment industry will also be great- ly impacted; we would have an increase of more than BRL 42 billion, generating almost 130,000 jobs. 54 55 55#29Photo: Cauê Diniz Y CONCE WSS MUNICIPIOS 间WBNDES JO GOVERN THE FUTURE OF SANITATION#30PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL The change with the new milestone has already started What do the beautiful Guanabara Bay, the great beaches of Maceió, and the wondrous Pantanal have in common? All these places are to benefit in the coming years with the universalization of sewage services, thanks to investments made through concessions and partnerships with the private sector. Between the second half of 2020 and the first half of 2021, four important auctions were held or prepared in the states of Rio de Janeiro, Alagoas, Mato Grosso do Sul and Espírito Santo.. This movement was made possible by an effort that had already been made before Law 14,026/2020, mainly with the model- ing made by BNDES, which spearheaded the structuring of three of these events. However, surely the positive environment due to the new milestone, in force since 15 July last year, had a great influence so that these bidding processes to be successful- ly completed. 80 7 6 12.31.33 Targets of Universalisation (Article 11-B of Law 11,445/2007). Exception: When there is economic and/or financial unfeasibility of universalisation, after the grouping of municipalities of different sizes. Time frame set at: 1 January 2040 (Art. 11-B of Law No. 11,445/2007). 12.31.22 Publication of basic sanitation plans (Article 19 of Law No. 14,026/20) GRAPH 21 Timeline after approval of the legal framework of sanitation Source: ABCON SINDCON 07.15.20 Publication of Law 14,026/20 12.24.20 Publication of Decree No. 10,588/20 05.31.21 Publication of Decree 10,710/21 58 58 1 2 3 5 4 03.31.22 Inclusion of the targets and goals in the contracts as currently effective (Art. 11-B, Par. 1, of Law 11,445/2007). Regionalisation of the provision of public sanitation services (Article 7, item II, of Decree 10,588/20 12.31.21 Time frame for requesting proof of economic and financial means (Article 10 of Decree No. 10,710/21) 07.15.21 Establishment, by the States, of the Regional Units of Basic Sanitation. If the time frame is not respected, then the Federal Executive Power shall establish the blocks for reference purposes (Art. 2°, Paragraph. 7, of Decree No. 10,588/20 59#31PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 TABLE 4 ANA regulatory agenda for 2021 Source: National Water and Sanitation Agency (ANA) A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Period 1st Semester 2021 1st Semester 2021 1st Semester 2021 1st Semester 2021 2nd Semester 2021 2nd Semester 2021 2nd Semester 2021 2nd Semester 2021 2nd Semester 2021 2nd Semester 2021 2nd Semester 2021 2nd Semester 2021 Theme Economic-financial rebalancing for water and sewage in bidding process contracts for the concession. Application of rate/tariff for municipal solid waste Minimum content of program and concession contracts for water and sewage. Standards and indicators of quality and efficiency, and evaluation of efficiency and effectiveness. Indemnification of assets for water and sewage. Organizational model of infranational regulatory agencies, transparency and accountability. Procedures for mediation and arbitration. Guidelines for infractions and penalties of the provider of water and sewage services. Matrix of risks of contracts for water and sewage. Guidelines for progressive coverage targets for water and sewage and evaluation system. Procedures for proving the adoption of reference standards. Guidelines for defining the regulation model for water and sewage. Auctions already held The auctions now in progress reflect the new reality of sanitation, characterized by com- petition, major investment and transparency in a sector that still has a lot to contribute towards the recovery of the economy. The formats and business models pro- posed by the auctions may be different, but they are all relevant to increase the univer- salization, still distant, of water and sewage services in the country. Whether full concessions, regionalized contracts, PPPs or other types of part- nership, the private sector is interested in the various possible concession models (more details in Chapter 6 on concession models). The important thing is to speed up investment and reduce the deficit of sanitation in the country. The auctions confirm the interest of private companies to invest after the new milestone is approved, including the arrival of new play- ers who wish to operate in the sector. Alagoas (Casal) The concession of supply and sewage ser- Cariacica e Viana, vices in the Greater Maceió Metropolitan Region (RMM) will bring sanitation to 13 cities and 1.5 million people, with a project- ed investment of BRL 2 billion in the first six years alone. The total investment is BRL 2.6 billion for 35 years of concession. Casal, The Sanitation Company of Alagoas, will remain as the party responsible for the production of water for the Metropolitan Region of Maceió. Held on 30 September 2020 at B3, in São Paulo, the auction of the services provid- ed the state with a grant of BRL 2 billion (13.182% above the initial amount set in the bidding process), after a bidding contest between seven consortia. Apart from the recent bidding process for the concession, Alagoas has two success stories in sanitation PPPS: Agreste San- eamento, of the Iguá Group, established a water PPP as signed in 2012. The conces- sionaire serves about 280,000 inhabitants of Arapiraca and nine other municipalities in the countryside of Alagoas state. In addi- tion, Saneamento Alta Maceió (Sanama), of the GS Inima Group, whose operations be- gan in 2016 and benefit 300,000 residents of the capital of Alagoas. Espírito Santo (Cesan) Another important event took place on 20 October 2020, also at B3, in São Paulo. Un- der a PPP regime with Cesan, the state san- itation company, a private concessionaire was selected to perform the sewage collec- tion and treatment in Cariacica and Viana, in the Greater Vitória Metropolitan Area. The services will be made universal with- in ten years. The investments shall reach BRL 580 million over 30 years of contract, and shall benefit 423 thousand people. The successful proposal showed up a negative goodwill of 38.13% on the sewage tariff set in the bidding process. Espírito Santo already has two other sewage PPPs in operation, in the cities of Serra and Vila Velha, in addition to the full private con- cession of Cachoeiro de Itapemirim, which has been in operation since the late 90s. 60 61#32PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 TABLE 5 Cedae (RJ) Auction Result Source: ABCON SINDCON A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Mato Grosso do Sul Rio de Janeiro (Sanesul) In partnership with state company Sanesul, the PPP of sewage services was agreed at an auction held on 23 October 2020, at B3, in São Paulo. The operation covers 68 municipalities in the state of Mato Grosso do Sul and includes investments of BRL 3.8 billion in 30 years of contract, benefiting 1.7 million people. The bidding process involved six consortia and resulted in significant negative good- will -38.46% that represents the saving of resources for public investment in years to come. - The state capital, Campo Grande, has had a hefty investment in its private water and sewage concession since the beginning of the last decade. (Cedae) As the largest infrastructure project in the country, the Cedae auction, held on 30 April, raised BRL 22.62 billion, to be shared be- tween the state and the municipalities that participated in the bidding process. The amount represents goodwill of 134% over the minimum grant provided (BRL 9.7 billion for three blocks with 29 municipali- ties), and will used for investments by the state government and municipalities to improve the lives of some 11 million inhab- itants. By way of comparison, in early April, the federal government raised BRL 10 billion in concessions for airports, port terminals and railways during a week of infrastructure auctions, the so-called Infra Week, which works out at less than half the proceeds from Cedae's auction. The consolidation of the competition brings the opportunity to inject BRL 46 billion into the economy. Block Block 1 Block 2 Block 4 Total Minimum grant (BRL billion) 4.037 3.172 2.503 9.712 Winning Grant 8.2 7.286 7.203 22.689 (BRL billion) Goodwill (%) 103% 130% 188% 134% Benefited population 2.8 1.2 7 11 (million) Planned investment (BRL billion) 8.3 2.7 16 27 With the project, non-urbanized favelas in Rio de Janeiro will receive a minimum in- vestment of BRL 1.86 billion in water sup- ply infrastructure. You just need to consider how much Rio de Janeiro will benefit from a clean Guanabara Bay to gauge the ben- efits of breaking with the current cycle of permanent lack of resources for sanitation in the state. Every single day, 282 tonnes of sewage or 28 trucks filled with material that should have been treated before returning to na- ture, are poured into Guanabara Bay. This is like a Christ the Redeemer of waste being unloaded every four days on the main at- traction of the Marvellous City. Were this to depend on Cedae's current level of investment, the problem of univer- salizing sewage treatment would only be solved in the next century. With the bidding process, the deadline will fall to 12 years. Cedae's current assistance levels only pro- vide 88% of the population with water sup- ply and only 37% with sewage collection. Cedae may get significant revenue from the sale of raw water, and so reduce operating costs and become financially sustainable. For the state, which faces a serious fis- cal situation, the impact on tax collection reaches almost BRL 1.4 billion, especially in the case of sales tax (ICMS), with a revenue forecast of about BRL 633 million. The success of the Cedae auction ushers in a great opportunity and incentives for new bidding processes to be made soon, already under the guidelines of the new milestone of sanitation. 62 69 63#33PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Future tenders Amapá With modelling from the Brazilian Nation- al Development Bank (BNDES), the tender process for the full concession of water and sewage services in the urban areas of the 16 municipalities of the State of Amapá has now been scheduled for September, and shall have bids that combine lower pric- es and higher grant value. The services are currently provided by Caesa, a state-owned sanitation company. At present, only one in three inhabitants of the state has access to running water, while sewage collection is limited to 7.1% of a to- tal population of 750 thousand people. This shall be the first major tender process for the sanitation sector in the North of the country, with a strong impact upon society and upon the environment. The expected investments reach a total of BRL 3 billion during a concession period of 35 years (of which BRL 984 million shall be in the first five years). Alagoas The tender for a new concession in the state of Alagoas has been pencilled in for the first quarter of 2022. The proposal is that there shall be two blocks of municipal- ities, with an expected investment of BRL 3 billion, and with 2.2 million people benefited. Rio de Janeiro (Block 3 of Cedae) The Government of the State of Rio de Janei- ro intends to hold a tender process for what is known as Cedae Block 3, a remnant from the tender process carried out in April, by the end of 2021. This block initially had six mu- nicipalities and part of the capital, but other cities have already informed that they would like to take part, considering the success of the first tender. It is estimated that this new tender shall make feasible an additional in- vestment of BRL 3 billion for the State. Being modelled or with undefined time frame The tender for concession of services cur- rently provided by Corsan in the state of Rio the model, which can be changed to the pri- Grande do Sul is awaiting a decision about vatisation of the company, as has already been suggested by the State Government. The BNDES calculates that this tender shall require an investment of BRL 3 billion. GRAPH 22 Map of projects being structured by BNDES and planned investments Source: BNDES and BNDES and news published in the press Amapá BRL 3.0 billion Porto Alegre (RS) BRL 2.2 billion Tenders planned for 2021 Tenders planned for 2022 A similar debate is unfolding in Minas Gerais. This State is, in any case, moving ahead with its process for regionalisation (establishment of blocks of municipalities). Porto Alegre, the capital of the Southern state of Rio Grande do Sul, is preparing a tender for sanitation services. Initially scheduled for 2021, this tender also de- pends on a decision made by the City Hall. BNDES studies for the concession have al- ready been completed, and the estimated investment is BRL 2.17 billion. Ceará BRL 6.4 billion Paraíba Project being strctured Alagoas Saneamento Block B and C To be defined Rio de Janeiro Block 3 Project being strctured Rio Grande do Sul To be defined The State of Ceará also has its concession project already drawn up by the BNDES for Fortaleza, the state capital, and also for the Cariri region. The initialexpectations are that the invitation to tender shall be brought out later in 2021, with an expected invest- ment of BRL 8.6 billion. The tenders for Rondônia and Acre depend on the participation of their respective cap- itals, to be confirmed. 64 44 65#34Ribeirão Preto THE PRIVATE SECTOR'S EXPERIENCE In this chapter, we present some success stories involving the public sector, in the provision of public water and sewage services throughout the country.#35PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Economy For inclusion in this aspect, the following differentials were considered: . • Investment of importance for the local reality • Creation of jobs Attraction of industries and other investments to the municipality Barcarena (PA) Full Concession In June 2020, the first sewage treatment plant in the municipality was inaugurated. This was the first step of a major challenge that Barcarena now faces: that of speeding up investment so that the city can stand out in the sanitation sector of Pará. Currently, just under nine thousand inhabitants out of a total population of 68 thousand have sewage service coverage. The forecast of the 'Aguas de São Fran- cisco' concessionaire, part of the Aegea Group, which has managed the services in the municipality since 2014, is that by 2022 Barcarena will have 24% of sewage service coverage, expanding the service to serve 14,000 residents, BRL 86 million have al- ready been invested to improve services for the population. The 'Água Pai d'Égua' project is under de- velopment in the city, consisting of the creation of multitasking teams that run through the neighborhoods, working on the regularization of the water supply. For wa- ter supply, 40 kilometers of water network are still to be implemented, together with the restructuring of 20 kilometers of exist- ing networks, to ensure there is water sup- ply reaching the taps of over 15,000 people. Manaus (AM) Full Concession Over the last two years, the city has received investments of more than BRL 388 million for the improvement of water supply and sewage collection and treatment. During this period, the concessionaire responsible for the services - Águas de Manaus - came under the control of the Aegea Group. Five new reservoirs were built to add to the water reserve in strategic regions, expand- ing capacity by 30 million liters, benefiting more than 600,000 inhabitants and reduc- ing the irregular water supply. Coverage rose from 87.79% to 98% of the population and the concessionaire has been match- ing the natural expansion of Manaus that, among Brazilian capitals, is still one of the fastest growing in the country in the last 10 years (its population increased by 25.5%, according to the IBGE). The concessionaire also kick-started the 'Vem com a Gente' (Come with Us) rela- tionship programme, which has brought treated water to places supplied with ir- regular connections and has promoted the regularization of water supply in socially vulnerable areas. With regard to sewage treatment, three new medium and large sewage treatment plants have been were delivered. The goal is to re- verse the worrying indicators of the Capital of Amazonas, which records coverage of only 23.80% with regard to treated sewage, with most of the volume being poured into streams, lakes and the Negro river. The collection and treatment networks were expanded, from a 12.3% coverage rate in 2018 to coverage of 22% at the end of 2020. This means that about 500 thousand manauaras (residents of Manaus) already have a sewage network available. The goal is to attain a level of 25% coverage by the end of 2021. Customers registered for the social tariff rose by 220%. The concessionaire encour- ages low-income users to adhere to the so- cial tariff. The benefit grants a 50% discount off the water bill. At present, some 63 thou- sand consumers have already signed up. 68 69 69#36PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 São Gabriel (RS) Full Concession One of the premises of the 'São Gabriel - Saneamento concessionaire - of the Solvi Group in the bidding process period was to offer a tariff 15% lower than the one be- ing charged in the municipality. After eight years of operation, the company managed to achieve a 29% lower tariff. Comparing the two concessionaires, a thousand liters of water would cost BRL 5.91 with the old concessionaire, with annual correction, which works out at BRL 1.33 more than what the current concessionaire will apply after its correction. In one year, the city of São Gabriel alone shaved BRL 5.3 million off costs incurred with sanitation services. If we consider the eight years in which the company has been operating in the municipality, then we see that over BRL 40 million, in adjusted val- ues, have already been saved. These are savings where everyone stands to benefit, especially consumers. The concessionaire is a pioneer, having spearheaded the collection of payments using the new PIX system for electronic payments. In addition to bringing custom- in settlement of invoices for the client, this ers quality of service, and ease and speed new development also slashes the com- pany costs as incurred with bank fees and charges (the mean cost today for counter the use of PIX, these values dwindle to only payment is BRL 1.59 per transaction; with BRL 0.33 per invoice).Another benefit is the swift checking of payments, in very short this facility is of paramount importance. time periods. For commercial management, The use of the PIX system also complies with the company's policy for external communi- cation, that of encouraging "stay-at-home", as a way to avoid contamination by Covid-19. Sumaré (SP) Full Concession Five years after the concession of sani- tation services in Sumaré, a city with 280 thousand inhabitants, a total sum of over BRL 131 million has already been invested for improvement of water supply services, as well as sewage collection and treatment. The investment was necessary to solve fre- quent problems of water supply interrup- tions. The occurrences resulted in a high number of complaints from the population. For the next two years, BRK Ambiental is following an investment programme of BRL 153 million. There are plans to build two large sewage treatment plants, making the city achieve universalization of sewage ser- vices by 2026 (100%). Expansion and modernization works will also be carried out at the municipality's water treatment plant. The company is also focused on reducing the loss of wa- ter throughout the distribution system. Since the beginning of the concession, the rate has been reduced from 60% (2015) to 36.5% (average for 2020). The services provided by the concessionaire made Sumaré one of the Brazilian munic- ipalities with the best results in sanitation services. The city occupies the 50th position on the Sanitation Ranking, released in March 2021, by the Trata Brasil Institute, in partner- ship with consulting firm GO Associados. 70 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL 71#37PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Operation, Technology and Management For inclusion in this aspect, the following differentials were considered: • • • • • . Engagement of people and processes, and results in terms of productivity Reduction of Losses Expansion of services Expansion of water supply Non-interruption of water (continuous supply) User satisfaction • Innovative technologies Ability to meet high season peaks Energy Efficiency Araçatuba (SP) Full Concession In 2020, the concessionaire GS Inima Sa- mar put into operation, by way of test, the solar sewage sludge drying plant (SRT - So- lar Aktive Drying technology) whose per- formance was better than expected. The reduction in the volume of sewage sludge has been greater than 90%, when a reduc- tion of 80% was expected. Installed in an area of 7,000 m², the so- lar sludge dryer processes 12 tons daily, that is, all the sludge remained from the STP Baguaçu. In addition to drastically re- ducing the expenses with the disposal of sludge in landfills, the new technology im- proves the quality of the material, pointing out the feasibility of its use in agriculture or soil remediation. In order to ensure a supply of water round the clock, seven days a week, to the pop- ulation of Araçatuba, concessionaire GS Inima Samar made significant investments last year. The main initiative was the con- struction of a new water treatment station with the capacity to treat 2,000 m³/h of water (checar), replacing two other existing ones that now serve 50% of the population, which works out at 100,000 people. Due for completion in 2022, the new station will in- clude a sample analysis laboratory for wa- ter quality monitoring and a modern sludge dewatering system. For 2021, the sectorization of the distribu- tion of treated water in the municipality is planned, improving the efficiency of ser- vices and reducing losses. After two years of work, the concessionaire completed the flow reversal of the sewage basin, from the Araguaína (TO) Full Concession The city of 178,000 inhabitants has an ex- clusively underground water catchment system. The concessionaire BRK Ambien- tal Saneatins operates 12 simplified treat- ment plants that make up the city's water system, using deep tube wells (DTW). Araguaína also has two sewage treatment plants and is about to get a new one, which will use Nereda technology (biological treatment by activated sludge). Still under construction, the new station will expand the sewage collection and treatment ser- vices in order to achieve universalization. northern part of Araçatuba to the Baguaçu STP, which was expanded to support the new demand, after population and indus- trial growth. Thus, two smelly treatment ponds that prevented additional industries in the region - which is now authorized - were disabled. The flow reversal has benefited more than 40 neighborhoods and integrated the rural area of Engenheiro Taveira district, in ad- dition to opening opportunities for new in- vestments in Araçatuba. Currently, 100% of residents have access ready have a collection network installed. Every day, 37 million liters of treated water are produced and about 4.7 million liters of sewage is collected and treated in the city. Investments amount to BRL 216 mil- lion in both systems. to treated water services and about 43% al- 72 73#38PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 Despite all investments, the concessionaire has the main challenge in Araguaína: that of raising awareness of environmental and public health issues involving water and sewage services. The irregular release of rainwater and garbage into sewage collec- tion systems is recurrent. A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Aegea Group Group - Infra Inteligente Programme Balneário Gaivota (SC) Full Concession The concessionaire Gaivota Saneamento (Atlantis Group) has operated the water supply service in the municipality since 2018. The company makes use of the Wa- terGems system to control the WTP. The software allows the analysis of the main- pipe distribution capacity and projects the expansion of networks to places not yet served within the municipality as well as suggesting points for improvement in ex- isting networks. Thanks to the new system, the concession- aire is able to make continuous improve- ments in the system to ensure regular sup- ply to the city's 11,000 inhabitants. The concessionaire has also presented very highly satisfactory results with the engage- ment of a commercial team to increase the hydrometers reading. The company reached an annual average of 99.84% out of 5,107 connections. For this, processes were created in order to solve difficulties shown by the team, such as access impediments and sight impair- ments among readers. Once the difficulties are presented, the team seeks to solve the problem in the shortest possible time, get- ting the other commercial areas involved. Launched in 2018, The Aegea Group's Infra Inteligente Programme was initially applied to the concessionaire's new tasks last year. So far, nine cities in the Greater Porto Alegre Metropolitan Area, as well as Cariacica (ES) and 68 municipalities of Mato Grosso do Sul are already using the new technology. With the use of intelligent 3D virtual mod- els of the Building Information Modeling (BIM) methodology, the concessionaires' physical asset bases were mapped and digitalized to create digital twins (digital copies of physical installations), which al- low improvements to processes, reduction of costs, shorter maintenance times, and fewer outages. Considered innovative for this segment in the country, this programme combines strategic business methodologies and the most advanced technologies (such as drones, 3D BIM modeling, digital twins and artificial intelligence). Infra Inteligente is be- ing phased in, in all 126 municipalities of the 12 states of the country served by the Group, with a total population of 11 million. Among the main benefits we have the generated digital models of networks and treatment plants that increase operational efficiency and optimize investment in new works, as well as improving the availabili- ty and quality of water supply and sewage collection and treatment services. There is also the management of technical informa- tion throughout the life cycle of the infra- structure, from construction engineering to the systems' operation and maintenance. This results in greater collaboration among technical areas, focusing on more assertive decisions in all phases of the water cycle. 74 75 25#39PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Águas do Brasil Group - Automation of WTPs In April, the Águas do Brasil Group, as part of its strategic planning, implemented Au- tomation for the Water Treatment Stations (WTP) of Coroa, the largest WTP of the Group, in the Águas do Paraíba Complex, and also the WTPs of Tapera and Santa Margarida, of the Águas de Nova Friburgo concessionaire. Conducted by the Research and Technolo- gy (R&T) area with the support of the Cor- porate Management of Automation and Energy, this project aims to automate the quality monitoring of treated and filtered water, in addition to allowing the automatic dosage of chemicals (coagulants, chlorine and fluoride) in the stations. Not having dedicated operators, the Units of Nova Friburgo will also have remote op- eration with automatic closure of the whole of the WTP, should the quality parameters reach defined critical values. These are not the first WTPs of the Group to be automat- ed: WTP Juturnaíba was the first to rely on automation in its processes. Now everything is done automatically and remotely. The installation of in-line instru- ments for analysis of quality parameters, such as turbidity, pH, color, chlorine, fluo- ride and load potential, together with pro- cess control automation (PID), allows the automatic dosage of chemicals (coagu- lants, chlorine and fluoride). The activation of the dosing pumps occurs through the supervisory system installed at each of the WTPs; the monitoring of the entire process can be done directly from the Laboratory. In the Águas de Nova Friburgo and Águas do Paraíba concessionaires, the superviso- ry system is monitored from miles away, at the Operational Control Center (OCC) at the company's headquarters. Another key point is the monitoring the quality of treated and filtered water, and the sending of the quality parameters to the SIGO (Integrated Operating Management System) are very important as, with in-line instruments, the measurement of quality data occurs every 5 minutes and the data is stored in a database, allowing operators to devote their benchtop analysis time (with such analysis being made every 2 hours) to more important tasks within the water treatment process. The project received a total investment of almost BRL 800,000 in 2020. This year, the Automation and Energy Management is di- rectly leading the WTP Alegria projects - of the Águas das Agulhas Negras concession- aire -, WTP Jundiaquara - of the Águas de Araçoiaba concessionaire - and the WTPs of Rio Grande de Cima and Jason - both of the Águas de Nova Friburgo concessionaire. Águas do Brasil Group Agua de Valor Programme The Água de Valor Programme, of the Águas do Brasil Group, has already cut water losses by more than 17 million m³ equivalent to 6,800 Olympic swimming pools over the last three years. Last year alone, this amount worked out at a saving worth almost BRL 10 million. The company has been stepping up efforts and invest- ments in this area, achieving better results in the cities where it operates. The mission of the Água de Valor Pro- gramme, that started in 2018, is to increase the efficiency of distribution systems, main- ly in a move to reduce water losses, thereby ensuring the water supply to the population and contributing to extend the guaranteed right to future generations. The programme was the winner of the 2020 Firjan Award, in the Water and Effluents cat- egory. Thanks to the implementation there- of, the company was able to reduce the vol- ume of water harnessed from springs and the need for investments in the expansion of production capacity, reducing economic and environmental impacts as well as slashing the consumption of energy and chemicals, so also contributing to the preservation of the environment and to reduction of operat- ing costs. Other good results were obtained with regard to the occurrence of fraud and the number of clandestine connections. 76 77#40PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL - Iguá Saneamento Mobile APP IguAPP Since December 2020, Iguá has had the innovative IguAPP application. Built in the Powerapps tool of Microsoft Office 365, this tool is now being used for operational con- trol. The new technology allows the precise identification of the services performed by the teams, and provides assertive and prac- tical calculations of network indicators. By mobile phone, the teams, who have un- dergone training, access the app using the corporate account password and connect- ing to the tool. The application uses the information to feed the operating system database, in addition to assisting the man- agement of teams by calculating the ser- vices productivity and providing materials and third parties management. It is also possible to manage the rental of equipment and maintenance of the fleet and electromechanics. This data is essen- tial for the reduction of operating costs and for asset management. In the first two months using the new tool, we could ob- serve an improvement of 33% in the Inter- nal Rate of Return indicator. Palestina (SP) Full Concession With the concessionaire ESAP, of the Aviva Ambiental and Iguá Groups, in operation since 2007, the municipality has one of the lowest rates of water loss in the country: 11% (average between May 2020, and April 2021). This excellent indicator is the result of constant investments and the perfor- mance of a specialized technical team. To achieve these indices, every day the company monitors the loss of water into the systems, with research carried out through the minimum night flow (technique used to measure water pressure and flow), mechanical listening rod on the city's water meter assemblies, and the use of the geo- phone, which identifies the exact location of the leak so that maintenance is carried out in the shortest possible time. In addi- tion, the population is invited to take part in this process through awareness cam- paigns in the fight against internal leaks in the residences. Moves to tackle fraud are also essential to achieve these results. The full concession in Palestina is valid for 30 years. SAP serves 12,000 people and works to universalize access of the popula- tion to quality water supply and sewage col- lection services. Within this effort, it is worth mentioning the inauguration of the Jurupeba sewage treatment plant last August. Thus, Palestine will reach 97% of sewage collec- tion and treatment coverage, getting close to universal provision of such services. The treatment system used at STP Juru- peba is activated sludge with prolonged aeration. The technology is more effec- tive for avoiding bad smells in the effluent treatment process. 78 79#41PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 80 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Piquete (SP) Full Concession The Águas de Piquete concessionaire, of the Iguá Group, managed to reduce the loss rate in the distribution system from 46% to less than 10%. The result was recorded a year after the start of our actions to tackle losses, which began at the end of 2019. Responsible for the water supply of more than 13,000 inhabitants, the company has begun to monitor the networks, at regular in- tervals, checking water pressure in various parts of the city, at different times of day. Pressure regulating valves, telemetrics con- trol and pictometry control were installed, allowing specific flow analysis. Leak main- tenance services started to follow strict time frames for execution. At the most crit- ical points, pipes were replaced. Together with maintenance actions, the water meter park was renewed. With the substantial decrease in losses, the concessionaire managed to save 56% in their consumption of chemicals and re- corded an energy efficiency of 9%, as well as direct impact on revenues. Social welfare For inclusion into this aspect, the following distinguishing factors were considered: • Advances in health Advances in education/professional qualification Palmas (TO) Full Concession The young city, founded only 32 years ago, is now considered the fifth Brazilian capital with the best sanitation index. According to the Sanitation Ranking - 100 Largest Cit- ies, launched in March 2021, Palmas ranks 28th, behind only four capitals: Curitiba, São Paulo, João Pessoa and Brasília. Over the last five years, over BRL 148 mil- lion has been invested in actions such as the implementation of new sewage collec- tion networks, expansion of the city's main water treatment plant - increasing its treat- ment capacity from 750 l/s to 1,500 l/s - as well as initiatives seeking to reduce losses; automation; and improvements that al- lowed the two systems, water and sewage, to keep up with the city's development and also expand service provision to new areas. The result appears directly in the munici- pality's health indicators. Palmas has re- duced the incidence of water-related dis- eases from 13.36 cases per 10,000 people in 2010 to 5.31 in 2018. In the same period, among children aged 0 to 4 years, the most vulnerable group, the incidence dropped from 103.03 (2010) to 46.95 (2018). Palmas stands out, appearing as a counter- point to the national and regional situation of water and sewage indicators: 100% of the city's residents have access to treated water, and 88% are covered by the sewage collection network. 81#42PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Penha and São Francisco do Sul (SC) Full Concession Essential for life and hygiene, water has become even more important, with the cur- rent spread of Covid-19.Soap and water are responsible for properly cleansed hands, surfaces and objects, thereby avoiding contamination. Paying close attention to the need for hygiene and health care of the population, the Águas de São Francisco do Sul and Águas de Penha concessionaires, both of the Aegea Group, have sought to ex- pand the scope of benefits provided by the water social tariff (WST) to ensure supply to those who live in a situation amounting to social vulnerability in both cities. The measure, however, should occur with the conscious use of water, thereby avoiding waste, in order not to have an impact upon the supply and the families' budget. Discount rates are regulated by the city councils. To participate, families must be included on the Federal Government's Single Regis- ter for Social Programmes (CadÚnico) and consume no more than 10 m³ of water/ month. Registration has become estab- lished as the main instrument for the identi- fication and characterization of low-income families, thus allowing their selection and inclusion in social programmes. In San Francisco do Sul, the goal is to include all families registered on the CadÚnico for the social tariff programme. In Penha, fami- lies registered on the Social Programmes of the City Department of Social Security, up to date with the payment of the rates, and that consume up to 10m³ of water/ month (prov- en taking the average consumption over the last twelve months), are entitled to the social residential water tariff. Zona Oeste Mais - Rio de Janeiro (RJ) Sewage Concession Winner of the Faz Diferença Award given by leading Rio newspaper 'O Globo', in 2019, the Qualifica Mais project, carried out by the Concessionaire Zona Oeste Mais San- eamento, has already trained 58 students over three years, with 16 of these managing to be integrated into the company's staff. The course is held in partnership with the Rio de Janeiro State Industry Federation (Firjan), Social Service for Industry (Sesi) and the National Industrial Learning Ser- vice (Senai), assisting with the methodolo- gy and skills training of the participants. Qualifica Mais has the main aim of sup- plying knowledge of work as a hydraulic fire-fighter to members of the local com- munity where the concessionaire is active (22 neighborhoods of the West Zone of Rio de Janeiro). All those who enroll go through a screening process. Once accepted, they participate in 128 hours of full-time train- ing: 84 hours of in-person technical class- es, where there is teaching of execution of installations and maintenance of hydraulic systems. Students receive transportation assistance and meals at the venue of the course, on course days. Due to the pandemic, the project did not of- fer classes in 2020, and is now awaits the end of the period with restrictive measures in place, to restart its activities. 82 22 83#43BUSINESS MODELS#44PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL - - The main models of partnerships with pri- vate enterprise for the operation of water and sewage services be they conces- sions, PPPs or subdelegations are ex- plained in detail in the pages that follow. The distribution of the current contracts, according to the modality, can be checked out in the graph on page 79. GRAPH 23 The distribution of contracts for munici- pal concessions is also shown, on page 81, while the distribution of regional and microregional concessions in the country appears on page 84, and the distribution of PPPs on page 87. In this chapter, we also present compari- sons regarding coverage, investments, and variation of expenses and fees, between private concessionaires and other sanita- tion operators Average water and sewage coverage rates by type of operator 2019 (%) Source: SNIS 2019 GRAPH 24 Average fee (BRL/m³) by type of operator Source: SNIS State Companies Private Companies 4.26 Municipal Services 4.79 4.36 4.54 3.86 4.29 3.51 3.92 3.64 3.20 2.75 2.84 2.62 2.41 2.13 86 79.6 91.2 89.6 97.5 94.9 89.6 State Companies Private Companies Municipal Services 73.1 2015 GRAPH 25 2016 2017 2018 2019 Total expenditure on services per billed m³ (BRL) by type of operator Source: SNIS 63.6 55.2 State Companies Private Companies Municipal Services 59.0 4.31 3.97 48.4 48.5 3.64 3.57 4.01 3.33 3.54 4.60 3.34 3.25 2.60 2.43 2.26 2.32 2.03 Total services of water supply Rate of water supply services in Sewage collection Sewage treatment rate rate, considering urban areas water consumed 2015 2016 2017 2018 2019 87#45PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 GRAPH 26 Average investment per water and sewage connection (BRL/ connection) by type of operator Source: SNIS 2015-2019 State Companies Private Companies Municipal Services 291 +32% 233 221 212 162 207 +23% 181 168 161 155 67 +31% 51 54 49 55 2015 2016 2017 2018 2019 GRAPH 27 Per capita investment by type of operator Source: SNIS e SPRIS para investimento privado 88 State Companies Private Companies 148.9 Municipal Services A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL GRAPH 28 Distribution of modes of contracts within the private sector Source: SPRIS 4% Sewage Partial Concession 10% PPPS 26% Water Partial Concession * As Other types of Contracts we have: Full Subconcession, Sew- age Subdelegation, and Leasing of Sewage Assets 3% Others* 58% Full Concession Modes Others* MW N NE S SE Total 1 0 1 0 3 5 78.3 75.7 PPPs 1 0 4 1 13 19 76.8 64.1 Full Concession 31 16 7 15 41 110 74.8 63.9 Sewage Partial Concession 0 0 0 1 7 8 56.8 55.4 54.0 Water Partial Concession 8 33 1 2 5 49 29.5 21.1 22.6 24.5 21.4 Total 41 49 13 19 69 191 2015 2016 2017 2018 2019 89#46PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 Concessions There are many models in which munici- palities and states can count on the private sector in the concession of water and sew- age services. The options are as follows. It is important to stress that all models pre- sented herein can be replicated/modeled according to the model of regionalized pro- vision model, as proposed in the new mile- stone of sanitation. Full or partial concessions Granting power transfers the following to Full concessions include both water and the concessionaire: a) all operation and maintenance of the wa- ter supply system and/or sewage services; b) responsibility to make the necessary investments for a given period (long con- tracts), during which the concessionaire will be remunerated by charging fees to us- ers. The public authorities set rules on the qual- ity of services and the tariffs composition, and a regulatory agency is responsible for monitoring the application of the terms laid down by the contract. sewage services. Partial concessions may be adopted only for one or the other of these services (water or sewage). Concessions, be they full or partial, may be either municipal ( serving a single munici- pality) or micro-regional/regional (serving more than one municipality). There are full and partial concessions, both municipal and micro-regional/regional, in nearly all Brazilian states. 90 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL TABLE 6 Total population served and materialized investment in 2019 in private municipal concessions Source: SNIS and SPRIS Municipal Concessions Benefited population* Investment materialized in 2019 13,318,157 BRL 1,485,453,306 * There are municipalities with more than one municipal concession. For these cases, it was analyzed whether there is overlap of the benefited pop- ulation and suppressed the amount that would generate double counting. Details can be found on page 127. GRAPH 29 Distribution of municipal concessions by States Source: SPRIS MA 3 AM 1 PA 7 PI 2 RO MT 4 38 739 ΤΟ 34 BA 2 MG 6 MS 1 SP 33 PR 2= RJ 11 1 SC 15 RS 2 ES 91#47PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL GRAPH 30 Average of water and sewage coverage rates in municipal full concessions and partial private concession Source: SNIS 2019 GRAPH 32 Average investment per connection (BRL/connection) and per capita investment (BRL)* in full municipal concessions and partial private concession Source: SNIS 2019 98.24 93.11 59.69 59.51 Rate of water supply services, general rate (%) GRAPH 31 Rate of water supply services, urban areas (%) Sewage treatment rate with regard to water consumed (%) Rate of sewage collection services (%) Sewage average tariff x Total expenditure on services per 3 m³ billed (BRL/m³) in municipal full sewage concessions and partial private concession Source: SNIS 2019 Average fee (BRL/ m³) 3.83 92 Total expenditure on services per m³ billed (BRL) 3.43 Investment per connection (BRL/ connection) Per capta investment (BRL)* 111 * Regarding the benefited population. 299 TABLE 7 Population served and investment materialized in 2019 in private Regional or Micro-regional concessions Source: SPRIS Regional or Micro- regional concessions Benefited population Investment materialized in 2019 2,802,769 BRL 245,374,009 93#48PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 GRAPH 33 Distribution of private regional and microregional concessions by State Source: SPRIS PA 2 AL ΤΟ 1 RJ 2 GRAPH 34 Average tariff x Total expenditure on services per m³ billed (BRL) in regional and micro-regional private concessions Source: SNIS 2019 94 Average fee (BRL/ m³) Total expenditure on services per m³ billed (BRL) 3.80 4.68 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL GRAPH 35 Average of water and sewage coverage rates in Regional or Micro-regional private concessions Source: SNIS 2019 94.06 82.16 55.17 55.17 Water service coverage rate (%) GRAPH 36 Water urban service Sewage collection Treated sewage rate coverage rate (%) rate (%) with regard to water consumed (%) Investment per connection (BRL/connection) and Investment per capita (BRL)* in regional and micro- regional private concessions Source: SNIS 2019 Investment per connection (BRL/ connection) 219 Per capta investment (BRL)* Regarding the benefited population. 126 95#49PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 PPPs Under Brazilian law, public-private part- nerships (PPPs) are administrative con- cession contracts that can be executed in sponsored or administrative mode, as set forth in Law 8,897 (Concessions Law). In sponsored concession, the Government makes a financial contribution (cash re- turn) in addition to fees paid by the user. In administrative concession, the private partner is compensated through public con- siderations, no fees being charged to users. One common combination is the sew- age PPP where there is the presence of the private sector through investments in management and infrastructure; this is in addition to the operation, while the public sanitation company continues to take care of services to the end user, the inspection of services, and the administration of the resources obtained through the task. to take care of end-user service, supervision of services and administration of resources obtained through the task. There are important sanitation PPPs in op- eration in the Brazilian states of Pernam- buco, Alagoas, São Paulo, Rio de Janeiro, Espírito Santo, Mato Grosso do Sul, Minas Gerais and Bahia. GRAPH 37 Distribution of PPPs by State Source: SPRIS MS MG 1 一唔 TABLE 8 Total population served and investment materialized in 2019 in PPPS Source: SPRIS PPPs * Regarding the benefited population. 96 Benefited population Investment materialized in 2019 Per capita* investment in 2019 14,548,031 BRL 2,212,429,514 BRL 166 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL PE 1 AL 2 31 BA ES 3 SP 7 RJ 2 RS 1 Subdelegations Models provided for by law 8,987/85 (Con- cessions Law), by which the sanitation ser- vice provider transfers some of its charges to third parties (delegated company). The company selling goods or services through a bidding process assumes all the rights and obligations of the delegated company within the limits of the delegation. There are delegation of sanitation services to the private sector operating in the States of Goiás and Piauí. Here we must mention that, after due ap- proval of the new milestone of sanitation, subdelegations were capped at 25% of the value of contracts awarded to subdelegat- ed companies. 97#50THE LARGEST ENVIRONMENTAL PROGRAM IN THE COUNTRY New milestone and universalization#51PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Environmental impacts The efforts and investments for Brazil to achieve the universalization of water and sewage services are more than just the path to economic recovery. They can be considered the largest ongoing environ- mental programme in the country. Depollution of rivers and springs, recovery of degraded areas, use of renewable energies and sustainability are some of the invaluable gains that the advance of sanitation should provide to the country in years to come, with the new milestone of the sector. According to the National Water and Sani- tation Agency (ANA), Brazil has more than 83,000 kilometers of polluted rivers (2019). The country pours nearly 6,000 Olympic swimming pools a day of untreated sewage into the environment, according to the Trata Brasil Institute (2019). Achieving universalization of sewage treat- ment, with the large investments in the coming years, is the answer to radically mit- igate this daily damage to bodies of water. Sanitation will be the infra- structure sector with the greatest economic and envi- ronmental impact in Brazil, in coming years. Sanitation and ESG Faced with the challenge of universalization, there is a greater need for direction of the investments of the sector in ESG (Environ- mental, Social and Corporate Governance). Sanitation concessionaires adopt, as a principle, what we call ESG Management, which focuses on best practices to meet the demands of the en- vironment, society and share- holders, all at the same time. There are many examples of how to align with ESG principles. In this con- text, the possibilities are: the transfor- mation of sewage treatment plants into sources of raw materials and supplies, thereby promoting sustainability; the use of renewable energy; and encour- agement of the preservation of rivers and other natural resources. Sanitation and SDGs Clean water and sanitation is the 6th Sus- tainable Development Goal of the so-called UN 2030 Agenda. SDG 6 calls on the world to make sure of availability and sustainable management of water and sanitation for all. From this perspective, sanitation conces- sionaires play a fundamental role in the search for treatment of water and sewage as a human right to be ensured. 100 Social and environmental indicators of private operators (SPRIS 2019) From among private concessionaires, we collected the most relevant and important data about the socio-environmental per- formance of companies. The result shows a segment that quickly adapts to the de- mands made and enforced by the ESG. 101#52PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL GRAPH 38 Social and environmental indicators of private operators Source: SPRIS 2019 Energy efficiency 63% have programmes in place for energy efficiency. : 11% of concessionaires use renewable energy. The fonts used are distributed as follows: 91% Biogas Environmental risks 1 9% Hydropower 64% of the concessionaires (holdings and/or SPES) have a formal process for the identification of environmental risks. Protection of watersheds Community 36% of concessionaires programmes for the protection of water catchment areas In a total of 3,510 protected hectares Human Rights 45% of the concessionaires (holdings and/or SPES) have investments in actions and in man- agement projects with local communities. BRL 91.8 million were invested in these programs by all concessionaires together Greenhouse gas emissions 57% of the concessionaires (holdings and/or SPEs), there are procedures for the measurement and/or reduction of the emission of greenhouse gases. Solid waste 66% of the concessionaires (holdings and/or SPES) have internal programmes for management of residue. Recycling 47% have recycling programmes in place 102 Environmental education Reports : : 72% of concessionaires have specific policies and procedures for upholding and preserving human rights. 74% of concessionaires have environmental educa- tion programmes. 1.2 million people were the total direct public in- volved in environmental edu- cation actions and initiatives 61% of concessionaires publish social and environmental responsibili- ty reports. 103#53PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL ESG We now report on some cases of private concessionaires that present the following as distinguishing factors: • • • • • • • Cleaning up of bodies of water • Recovery of green areas Training of local residents for sustainable activities Reuse of sewage sludge Reuse of water Use of solar energy Engagement in public campaigns Educational/pedagogical programs Citizenship programs Compliance - measures/guidelines of the institution focused on the consolidation of the concept Aquapolo (SP) Private contract Considered the largest industrial water reuse industry in South America and one of the largest in the world, Aquapolo has been operated by GS Inima Industrial since 2019. The facility is the result of the part- nership between GS Inima and local water company Sabesp. Aquapolo uses the sewage generated by 1.5 million inhabitants, from the area between the capital and the ABC conurbation of São Paulo State, in order to produce 1,500 liters of reuse water, after due treatment at the WTP of the ABC. Out of this total, 650 liters are delivered to companies in the ABC Pet- rochemical Pole. This volume of water can supply a city of 500,000 inhabitants. Aquapolo's work starts at Sabesp's pump- ing stations, which pump the sewage to the ABC WTP. Sensors installed in the pumping stations first estimate the toxicity of the ef- fluent load that shall reach the WTP in the short term. After the treatment process, the effluents that would be poured into the Meninos Stream (watercourse to which water is routed after treatment) run to the ABC Petrochemical Pole and are then used in various processes, avoiding the use of drinking water in industrial applications. According to the unit, the operational reli- ability is above 99.9%, high quality in reuse Arapiraca (AL) PPP Water Farmers in the city of Arapiraca (AL) are reusing the polypropylene blanket in family farming, and can already witness improve- ments in the production of vegetables. The blanked, of geobag and polypropylene with UV protection, is used for water treatment; in agriculture, it is placed directly on the soil, allowing the cultivation of seedlings, with flow of water and light, favoring productiv- ity and reducing maintenance costs. Con- sidered a pioneer in the state, this method helps productivity, in addition to reducing the plantation maintenance costs. The distribution of blankets is part of the Agreste Rural project, which has been car- ried out since 2018 by the Concessionaire Agreste Saneamento, of the Iguá Group. The first kits were delivered in 2019 to sev- en farm families. The project works in part- nership with the local government of the water. Aquapolo is a pioneer in the use of sanitary effluents for industrial activities, thereby contributing to environmental sus- tainability and helping economic growth, as water, together with electricity, are indispens- able supplies for any production process. city of Arapiraca, which registers produc- ers - preferably organic - so that they can receive geobags. This means that the blan- kets used in the water treatment are 100% recycled. In addition to being sustainable, they provide a 40% reduction in water use in crops as well as reducing the use of pes- ticides as they act as a protective barrier between soil and vegetation. It is also worth mentioning other advances made by Agreste Saneamento (Iguá Group), a water PPP that serves Arapiraca and nine other municipalities of Alagoas. The com- 104 105#54PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL pany achieved important results in reducing losses with the use of pipers technology, which identifies major pipe corrosion. A research and development project was also drawn up, in search of a new sealing technology, with injectable sealant. Be- tween January 2020 and July 2020, while synthetic fiber packing was used, 53 inter- ventions were made on the equipment; af- ter the change, only five such interventions were necessary. Araruama, Saquarema and Silva Jardim (RJ) Full Concession concession- The Águas de Juturnaíba aire (Águas do Brasil Group), in partnership with the Lagos São João Hydrographic Basin Committee, is carrying out an envi- ronmental education project to restore the riparian forest of the Juturnaíba reservoir. This project has already reforested over 9 hectares of riparian forest, that are kept un- der observation by professionals to make sure that the vegetation is indeed vegeta- tion is established on site. The project also reached over 1,000 people, through educa- tional actions. The project has had important and benefi- cial impacts on the local ecosystem. These include carbon sequestration and neutral- ization, caused by the reforested green area; the return of the native fauna, which had already left the area in many cases; an increased volume of water in the local bodies of water, through recomposition of springs; protection of the banks of the reservoir; reduction of erosion, resulting in a reduction of the silting of the Juturnaíba reservoir and its tributary streams. In ad- dition, it promotes awareness, among the population, with regard to sustainability and the preservation of the environment. Every year, the concessionaire promotes the clean-up of the Juturnaíba, a reservoir that supplies eight cities of the Coastal Lowlands of Rio de Janeiro State. With the support of public agencies and volunteers, actions to raise awareness of the local pop- ulation about the inadequate disposal of lit- ter and the damage it brings to the environ- ment are carried out. In 11 editions of this project, over two tonnes of garbage have been removed from the watershed (plastic bottles and bags, tyres, electronics, domes- tic appliances and furniture). Atibaia (SP) PPP Sewage All the sludge generated in the sewage treat- ment process of the city of Atibaia is turned into fertilizers by composting. With this ini- tiative, since March 2020, about 40 tonnes of sludge, generated monthly, are no longer dumped into landfills, having been reused as fertilizer for agriculture. Every 2.6 tonnes of waste produce one tone of organic fertilizer. For this, concessionaire Atibaia Saneamen- to, of the Iguá Group, sends the sludge to a company that uses the hemophilic system, so the pathogens may be removed. The fi- nal product looks like soil, is rich in nutrients, and is a great fertilizer reused by farmers. In 2020 Atibaia Saneamento produced 184.6 tonnes of agricultural fertilizer, the compost can be up to 50% cheaper than synthetic fertilizers, as well as bring more efficient when compared to other fertiliz- ers. What would be garbage is reused to keep the economy moving, adding value to the process and generating social impact. Aegea Group - Pioneiros Project In order to encourage innovative thinking among high school students from public schools and widen the scope of information on the importance of sanitation services, Aegea has been carrying out the Pioneiros Project since 2019. Professional people from the group's concessionaires act as volunteer tutors to provide young people with knowledge about the labor market, wa- ter supply services, sewage collection and treatment, with the aim of encouraging and developing thoughts about the students' professional future, in addition to bringing creativity and innovation to the sector. The youngsters go through a period of lec- tures and activities in the concessionaires, with a duration of four months, and have ac- cess to the courses available at the Aegea Academy. They are then challenged to devel- op a project proposing a creative solution to a problem as identified in their community. The projects devised by the young people then compete for prizes at the concession- 106 107#55PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 aires, awarded by Aegea, with the best qual- ening of the company's relationship with ifying for the national stage. In the project's second edition, in 2020, the Pioneiros project had the participation of 106 young people from 10 municipalities where Aegea operates, namely: Manaus (AM), Bar- carena (PA), Teresina (PI), Timon (MA), Barra do Garças (MT), Campo Grande (MS), Campo Verde (MT), Primavera do Leste (MT), Sinop (MT) and Sorriso (MT). Last year the project had to undergo a redesign due to the pan- demic, and is now applied online. Among the main results observed in young people who have been through the course are: the reduction of the school dropout rate, development of projects, strength- communities, encouragement of volun- tary work, and the opening up of job op- portunities. Some young pioneers have the chance to be hired as apprentices at the end of the project, or even be taken on permanently by the company. "In conversations with the tutors, we see that the dynamics with young students, based on exchanges, creates a vision of the future, vision of discipline and, in a way, lights up the path for the development of these young people, whose destiny is to take care of their communities. This feedback between pro- fessionals and students will bear surpris- ing fruit in the future", highlights Radamés Casseb, the CEO of Aegea Saneamento. Guaratinguetá (SP) PPP Sewage Since 2008, the Guaratinguetá Saneamento concessionaire (Iguá Group) is responsible for sewage collection and treatment ser- vices for the population of almost 110,000 people. In order to promote sustainability by reducing the consumption of drinking water for less prestigious purposes in drain clearance services, since December 2020, the company has been reusing the treated effluents to supply vacuum trucks. With this initiative, the station has been able to significantly reduce the consumption of drinking water that was formerly necessary to carry out drain clearance services. The concessionaire estimates that 150 m³ of water will be saved every month, with the reuse of treated effluent. The volume is enough to supply about 750 people per month and 9,000 people a year. The use of treated effluents for urban pur- poses has been prominent in the state of São Paulo since 2017, when Joint Reso- lution SES/SIMA No. 01 was created. The implementation of the reuse system is effi- cient for a swift reduction of consumption and costs with drinking water, bringing a fast return at a low cost. 108 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL 109#56PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Jundiaí (SP) Sewage Partial Concession. For more than 15 years, the local conces- sionaire, Companhia Saneamento de Jun- diaí, has maintained a highly relevant social project, the Casa da Fonte project. Last year, the pandemic has made the initiative need to change its strategy for care, and the scope of care, to the detriment of support for basic and vocational education. This change was necessary so that the Casa da Fonte project could help people living in a situation of vulnerability. In addition to the donations made by CSJ, there was a search for partners willing to join forces, so that more families could be served. In this way, Casa da Fonte was able to expand its capacity to bring basic condi- tions and affection to families in need. Between March 2020 and March 2021, over 16,000 masks were produced and donated, while 15,000 disposable aprons were do- nated to the health services in Jundiaí. In addition, donations were delivered to regis- tered families, as follows: 1,247 basic food baskets; 4,066 baskets with fruit and veg- etables, bread, biscuits, soups, eggs and milk; 883 personal hygiene kits; 337 kits with books and toys; and 2,474 booklets with lessons and exercises in Portuguese, Mathematics, Literacy Classes, and sup- port for emotions, for children who do not have an Internet connection. For those who have Internet access, the Casa da Fonte project kept broadcasting its online classes, available on its channels on YouTube, Instagram, and Facebook, and in its WhatsApp groups. Social assistance ser- vices were also expanded. Between March and December alone, 636 visits were made. Mogi Mirim (SP) Sewage Partial Concession Operator of sewage services, local con- cessionaire SESAMM Serviços de San- eamento de Mogi Mirim (controlled by GS Inima Brasil, Sabesp and ECS Operações e Participações), started to generate energy for operational use, with the implementa- tion of a unit for harnessing solar energy through the use of photovoltaic plates. The PV-PP accounts for about 30% of the energy needed to operate the Mogi Mirim STP, which has the capacity to treat 150 Petrópolis (RJ) Full Concession The biodigesters of the Águas do Impera- dor concessionaire (Águas do Brasil Group) are a national and international reference benchmark for their socio-environmental value. Apart from treating the sewage of needy communities in remote locations, the company carries out environmental ed- ucation work in the region and, whenever possible, uses local labor in construction. The filters of biodigesters are made with thousands of tyres and plastic bottles, both highly polluting materials, which are thus removed from the environment and are liters of sewage every second (88% of the volume generated by the population). In ad- dition, all the water for non-potable purpos- es used in the STP is reused. 110 111#57PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 also given a role of depollution. There is no charge for treatment, and the biogas gen- erated is used in day care centers and by residents of the community itself. In addition, biodigesters do not consume electricity, treat sewage at the site where it is generated, and then, at the end of the Piracicaba (SP) PPP Sewage This municipality, with a population of about 408 thousand people, has stood out nation- ally for its improvements in operation and its results concerning sustainability. Re- sponsible for sewage collection and treat- ment services, the concessionaire Águas do Mirante, of the Aegea Group, began to reuse the sludge remaining from the sew- age treatment as fertilizer. The significant investment in the operation includes the time dedicated to research and innovation to make it possible to use the materials in agriculture. The project has the participa- tion of the campus of the Luiz de Queiroz School of Agriculture (Esalg), part of the University of São Paulo (USP). About 900 tonnes of sludge, collected in the city's STPs, are taken to a kind of green- house for drying. In less than a month, the residue decreases by three times its initial volume, thus presenting a soil aspect. This is when it is ready to be used as fertilizer for agriculture as it has large concentrations of nutrients. The project is considered as be- process, the effluents are released into riv- ers with up to 85% purity in relation to the initial organic load. Currently, the concessionaire manages ten biodigesters, which guarantees reuse of a total of 280,000 plastic bottles and almost three thousand tyres. ing highly beneficial to the environment. Be- fore the operation, all the sludge from the stations would be taken to the landfill. Another important change to assure the rates of sewage service and improvement to the population's quality of life has been the implementation of collection networks in communities located in regions that are not part of the concession. This action has been carried out since 2017. Since then, more than 10 kilometers of networks have been installed. Thirteen communities, with 2,000 families, have benefited. Resende (RJ) Full Concession Developed by the Águas do Brasil Group, the Olhar Ambiental programme enables the planning and management of environ- mental education actions carried out by the holding and its concessionaires. The project has benefited about 170,000 people since its implementation, in 2014. In 2020, the programme reached out to 1,853 people by adapting some of the proposed activities, to ensure the safety of participants and the teams involved, faced with the Covid-19 pandemic. In Resende, the Águas das Agulhas Negras, which belongs to the Group, is one of the concessionaires that has contributed most to the programme, by serving people during activities within technical activities to water and sewage treatment plants, workshops and socio-environmental events. With the current pandemic scenario, the concessionaire has made a virtual tour of WTP Alegria available, through the Olhar Ambiental 360° project. The project allows a fully immersive experience in virtual real- ity, leading the visitor to know all the pro- cesses used in treatment of water. 112 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL 113#58Niterói CONCESSIONS FRAMEWORK#59116 PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 Municipalities Concessionaire ALAGOAS Atalaia Barra de Santo Antônio Barra de São Miguel Coqueiro Seco Maceió Marechal Deodoro Messias Murici Paripueira Pilar Rio Largo Santa Luzia do Norte Satuba Arapiraca Campo Grande Holding Contract model Contract date Term Benefited population Investment made in 2019 (BRL million) Abastecimento de Água e Esgotamento Sanitário da Região Metropolitana de Maceió BRK Ambiental Full concession 2020 35 857,000 Coité do Noia Craíbas do Nunes Feira Grande Grau do Ponciano Igaci Agreste Saneamento Iguá Saneamento PPP Water 2012 30 262,576 5.63 Lagoa da Canoa Olho Dágua Grande São Brás Maceió Sanama Saneamento Alto Maceió GS Inima Brasil PPP Sewage 2014 30 350,000 38.50 23 3 1,119,576 44.12 AMAZONAS Manaus 1 Águas de Manaus Aegea Full concession 2000 45 1 2,128,266 2,128,266 177.46 177.46 Municipalities Concessionaire BAHIA Lauro de Freitas Salvador Prado Serra do Ramalho* Holding BRK Ambiental Jaguaribe BRK Ambiental Concessões Água e Saneamento do Prado Socienge Engenharia e Águas de Serra do Ramalho Saneamento Brasil Engenharia 4 3 ESPÍRITO SANTO Contract model A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Contract date Term Benefited population Investment made in 2019 (BRL million) PPP Sewage 2006 19 19 1,944,000 2.75 Full concession 2019 30 28,194 Full concession 2019 30 31,472 2,003,666 2.75 Cariacica Ambiental Cariacica Aegea PPP Sewage 2020 30 142,856 Cachoeiro de Itapemirim BRK Cachoeiro de Itapemirim BRK Ambiental Full concession 1998 50 208,499 8.17 Serra Ambiental Serra Aegea PPP Sewage 2014 30 348,180 29.82 Vila Velha Ambiental Vila Velha Aegea PPP Sewage 2017 30 166,028 13.65 4 4 865,563 51.64 GOIÁS Aparecida de Goiania Jataí Rio Verde Trindade 4 MARANHÃO Paço do Lumiar São José de Ribamar Timon 3 1 BRK Ambiental Goiás BRK Ambiental Subdelegação Esgoto 2013 n.d. 600,731 791.59 600,731 791.59 BRK Ambiental - Paço do Lumiar BRK Ambiental Full concession 2014 35 113,411 12.22 BRK Ambiental - São José de Ribamar BRK Ambiental Águas de Timon Saneamento Aegea Full concession Full concession 2014 35 164,911 15.12 2015 30 146,996 7.43 3 425,318 34.78 117#60118 PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 Municipalities Concessionaire MINAS GERAIS Sanarj Concession, de Araújos Saneamento Básico Belo Horizonte Betim Contagem Ibirité Igarapé Lagoa Santa Mário Campos São Joaquim de Bicas São José da Lapa Sarzedo Vespasiano Holding Contract Global Engenharia. Planex Full concession Consultoria model Contract date Term Benefited population Investment made in 2019 (BRL million) 2002 30 8,000 0.03 Sistema Rio Manso BRK Ambiental PPP Water 2013 15 1,400,000 870.07 Pedro Leopoldo Ribeirão das Neves Santa Luzia Ouro Preto Pará de Minas Paraguasu Bom Sucesso Águas de Bom Sucesso Saneouro Concessionária de Tratamento de Água e Esgoto Águas de Pará de Minas Coságua Global Engenharia. Planex Full concession Consultoria GS Inima Brasil 2002 25 17,603 0.25 Full concession 2019 35 70,781 0.01 Saneamento Ambiental Águas do Brasil Full concession 2015 35 93,950 13.48 Global Engenharia. Planex Consultoria Full concession 2000 30 20,333 0.28 Santo Antônio do Amparo Águas de Santo Antônio do Amparo Socienge Engenharia e Concessões Full concession 2019 30 15,168 0.56 20 7 1,625,835 884.69 MATO GROSSO DO SUL Campo Grande Águas Guariroba Aegea Full concession 2000 60 883,962 105.43 Dourados +67 Municípios Ambiental MS Pantanal Aegea PPP Sewage 2021 30 655,037 69 2 1,538,999 105.43 Municipalities Concessionaire Holding Contract model A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Contract date Term Benefited population Investment made in 2019 (BRL million) Barra dos Garças MATO GROSSO Alta Floresta Arenápolis Águas Alta Floresta Águas de Arenápolis Águas de Barra dos Garças Iguá Saneamento Nascimento Engenharia Full concession Full concession 2002 30 44,322 1.83 Aegea Full concession Campo Verde Águas de Campo Verde Aegea Full concession 2001 2003 2001 30 9,600 0.06 30 54,957 5.23 30 35,513 8.17 Canarana Águas Canarana Carlinda Águas de Carlinda Iguá Saneamento Aegea Full concession 2000 40 17,035 1.38 Water concession 2004 30 4,290 0.09 Cláudia Águas de Cláudia Aegea Full concession 2004 30 9,842 0.19 Colíder Comodoro Confressa Águas Colider Águas Comodoro Águas de Confresa Iguá Saneamento Iguá Saneamento Full concession Full concession 2002 30 26,693 1.58 2007 30 14,100 0.56 Aegea Full concession 2014 30 17,519 1.63 Cuiabá Diamantino Águas Cuiabá Iguá Saneamento Full concession 2012 30 601,116 247.33 Águas de Diamantino Aegea Full concession 2014 30 22,041 1.22 Guarantã do Norte Águas de Guarantã Aegea Full concession 2001 30 29,874 0.72 Jangada Águas de Jangada Aegea Full concession 2004 30 5,742 0.06 Jauru Águas de Jauru Aegea Full concession Juara Águas de Juara Marcelândia Águas de Marcelândia Pereira Campanha Aegea Full concession 2012 2001 30 7,753 1.21 30 31,000 0.81 Full concession 2003 30 6,494 0.12 Matupá Águas de Matupá Aegea Nobres Empresa de Saneamento de Nortelândia Nova Canaã do Norte Novo São Joaquim Nova Xavantina Paranatinga Pedra Preta Águas de Canaã Setae Serviço de Tratamento de Água e Esgoto - Novo São Joaquim Setae Serviço de Tratamento de Água e Esgoto - Nova Xavantina Nobres Águas de Nortelândia Encomind Engenharia Aegea Full concession Full concession 2001 30 12,771 2.44 1999 30 15,334 Construtora Premier Setae Serviço de Tratamento de Água e Esgoto Water concession Water concession 2002 2009 50 4,903 0.10 30 12,787 0.56 Water concession 2001 30 3,198 0.02 Setae Serviço de Tratamento de Água e Esgoto Water concession 2001 30 20,974 0.38 Águas de Paranatinga Aegea Full concession 2015 30 17,329 2.38 Águas de Pedra Preta Aegea Full concession 2003 29 12,735 0.29 Peixoto Azevedo Poconé Águas de Peixoto de Azevedo Aegea Full concession 2000 30 27,729 0.57 Águas de Poconé Aegea Pontes e Lacerda *Porto dos Gaúchos Porto Esperidião Primvera do Leste Sapezal Santa Carmen Águas Pontes e Lacerda Águas de Porto dos Gaúchos Aguas de Porto Esperidião Saneamento e Distribuição Águas de Primavera Ltda Naturágua Distribuidora de Água Águas de Santa Carmem Iguá Saneamento Lugui Construtora de Obras e Saneamento Water concession Full concession 2008 16 23,366 0.29 2000 30 37,634 1.83 Water concession 2018 30 5,410 Aegea Full concession 2012 30 4,579 0.04 Aegea Full concession 2000 30 58,690 11.23 Naturágua Distribuidora de Agua Full concession 2000 30 21,633 0.48 Aegea Water concession 2001 30 3,413 0.03 119#61120 Araguaia PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 Municipalities Concessionaire Holding Contract model Contract date Term Benefited population Investment made in 2019 (BRL million) São José do Rio Claro Águas de São José do Rio Claro Aegea Full concession 30 15,890 0.08 Sinop Águas de Sinop Aegea Full concession 2014 30 118,536 7.64 Sorriso Águas de Sorriso Aegea Full concession 30 90,313 10.72 União do Sul Águas de União do Sul Aegea Full concession 30 2,192 0.01 Vera Águas de Vera Aegea Full concession 2004 37 8,120 0.05 38 38 1,455,427 311.31 PARÁ Abel Figueiredo Barcarena Bom Jesus do Tocantins Abastecimento de Água (Abel Hidroforte Administração Figueiredo) Water concession 2018 30 6,616 0.09 e Operação Águas de São Francisco Aegea Full concession 2014 30 27,579 3.91 Eldorado dos Carajás São Geraldo do Saneatins Santana do Araguaia São João do Araguaia BRK Ambiental Araguaia BRK Ambiental Full concession 2006 30 78,156 6.03 São Domingos do Araguaia Redenção Curionópolis BRK Ambiental Full concession 2007 30 96,253 3.28 Tucumã Xinguara Itupiranga Jacundá Novo Progresso Novo Repartimento Rurópolis Abastecimento de Água e Coleta de Esgoto (Itupiranga) Jacundá Ambiental Águas de Novo Progresso Abastecimento de Água (Novo Repartimento) Águas de Rurópolis Aegea Hidroforte Administração Full concession 2015 30 4,947 2.11 e Operação Aviva Ambiental e Ello Serviços. Obras e Participações Full concession 2018 30 25,506 1.06 Full concession 2003 30 18,167 0.36 Hidroforte Administração e Operação Water concession 2019 30 3,519 1.29 Perenge Engenharia e Concessões e Pavienge Engenharia Full concession 2019 30 28,000 17 9 288,743 18.14 Municipalities Concessionaire PERNAMBUCO Abreu e Lima Araçoiaba Cabo de Santo Agostinho Camaragibe Goiana Igarassu Ipojuca Itamaracá Itapissuma Jaboatão dos Guararrapes Moreno Olinda Paulista Recife São Lourenço da Mata 15 Holding Contract model A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Contract date Term Benefited population BRK Ambiental Atlântico BRK Ambiental PPP Sewage 2013 35 1,297,941 1,167.65 1 PIAUÍ Bom Princípio do Piauí Landri Sales Teresina Companhia de Abastecimento de Bom Principio Soluções de Águas e abastecimento de Landri Águas de Teresina Diniz Neto Soluções de Águas e Esgotos Aegea 3 PARANÁ Paranaguá 3 1,297,941 1,167.65 Diniz Neto Soluções de Águas e Esgotos Water concession 2018 30 5,651 Full concession 2019 30 5,283 Sewage subdelegation 2017 30 30 815,271 113.71 826,205 113.71 Paranaguá Saneamento Iguá Saneamento Full concession 1997 45 149,329 47.89 1 1 149,329 47.89 121 Investment made in 2019 (BRL million)#62122 PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 Municipalities Concessionaire Holding RIO DE JANEIRO Armação de Búzios Arraial do Cabo Cabo Frio Prolagos Contract model Contract date Term Benefited population Investment made in 2019 (BRL million) Municipalities Concessionaire Holding Aegea Full concession 1998 43 413,747 46.16 RIO GRANDE DO SUL Iguaba Grande São Pedro da Aldeia Araruama Saquarema Silva Jardim Alvorada Cachoeirinha Águas de Juturnaíba Saneamento Ambiental Águas do Brasil Full concession 1998 50 Canoas 50 226,178 31.13 Eldorado do Sul Campos dos Goytacazes Guapimirim Macaé Niterói Nova Friburgo Paraíba do Sul Águas do Paraíba Fontes da Serra BRK Ambiental Macaé Águas de Niterói Águas de Nova Friburgo Águas da Condessa Saneamento Ambiental Águas do Brasil Esteio Ambiental Metrosul Aegea PPP Sewage 2020 35 451,590 Full concession 1999 60 482,369 65.71 Emissão Engenharia BRK Ambiental Water concession 2000 30 43,936 Gravataí Guaíba PPP Sewage 2012 35 182,241 23.25 Saneamento Ambiental Águas do Brasil Full concession 1999 50 513,584 34.97 Saneamento Ambiental Águas do Brasil Saneamento Ambiental Águas do Brasil Full concession 1999 40 166,570 24.51 Viamão São Gabriel Uruguaiana Full concession 2020 35 44,285 11 3 Sapucaia do Sul São Gabriel Saneamento BRK Ambiental Uruguaiana Solví Full concession 2012 30 BRK Ambiental Full concession 2011 30 55,231 126,970 5.11 29.54 633,791 34.65 Paraty Petrópolis Rio de Janeiro Rio das Ostras BRK Ambiental Rio das Ostras Resende Águas das Agulhas Negras Águas de Paraty Águas do Imperador Saneamento Ambiental Aguas do Brasil PPP Water and 2014 30 32,098 0.17 Sewage Şaneamento Ambiental Águas do Brasil BRK Ambiental e Zona Oeste Mais Saneamento Saneamento Ambiental Águas do Brasil BRK Ambiental Full concession 1997 45 49 296,575 11.77 Sewage concession 2012 30 1,425,330 109.67 Sewage concession 2007 16 38,594 5.22 Şaneamento Ambiental Águas do Brasil Full concession 2008 30 127,039 8.52 Santo Antônio de Pádua Águas de Pádua São José do Vale do Rio Preto Águas do Rio Preto Empresa de Saneamento Ambiental e Concessões Empresa de Saneamento Ambiental e Concessões Water concession n.d. Guabiruba n.d. 42,479 Gravatal Water concession n.d. n.d. 13,299 0.40 Itapema SANTA CATARINA Balneário Gaivota Bombinhas Blumenau Camboriú Caçador Gaivota Saneamento Aguas de Bombinhas BRK Ambiental Blumenau Águas de Camboriú BRK Ambiental Caçador Guabiruba Saneamento Gravatal Saneamento Águas de Itapema Atlantis Aegea Atlantis Atlantis Itapoá 21 15 4,048,324 361.49 RONDÔNIA Ariquemes Águas de Ariquemes Aegea Buritis Aguas de Buritis Aegea Full concession Full concession 2016 30 73,422 6.75 2015 30 3,519 0.44 Pimenta Bueno Águas de Pimenta Bueno Aegea Full concession 2015 30 31,885 1.16 Saneamento Full concession 2018 35 8,484 0.44 Full concession 2016 35 19,769 6.69 BRK Ambiental Aegea Sewage concession 2010 35 149,926 21.20 Full concession 2015 35 78,823 2.74 BRK Ambiental Water concession 2018 30 63,151 5.47 Full concession 2020 30 14,950 Full concession 2018 30 10,371 0.23 Conasa Infraestrutura Full concession 2004 40 64,689 48.43 Itapoá Saneamento Iguá Saneamento Full concession 2012 30 20,371 15.03 Jaguaruna Jaguaruna Penha São Francisco do Sul Sombrio Tubarão Águas de Jaguaruna Atlantis Water concession 2007 35 12,240 0.14 Jaguaruna Saneamento Atlantis Full concession 2016 40 13,749 0.27 Águas de Penha Aegea Full concession 2015 35 29,181 9.75 Águas de São Francisco do Sul Aegea Full concession 2014 35 47,400 24.43 Sombrio Saneamento Atlantis Full concession Tubarão Saneamento Iguá Saneamento Full concession 2020 2012 35 30,374 30 105,686 32.17 14 15 669,164 167.01 Contract model Rolim de Moura Águas de Rolim de Moura Saneamento Aegea Full concession 2016 30 41,330 1.30 4 4 150,156 9.65 123 Contract date Term A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Benefited population Investment made in 2019 (BRL million)#63PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 Municipalities Concessionaire SÃO PAULO Álvares Florence Andradina Araçatuba Araçoiaba da Serra Arujá Datema Ambiental Saneamento Básico Águas Andradina GS Inima SAMAR -Soluções Ambientais de Araçatuba Águas de Araçoiaba Ferraz de Vasconcelos Guarulhos Santo André São Paulo (Zona Oeste) Holding Contract model Contract date Term Benefited population Investment made in 2019 (BRL million) Dqt Saneamento Basico E Meio Ambiente Full concession 2012 30 2,804 Iguá Saneamento Full concession 2010 30 57,157 7.47 GS Inima Brasil Full concession 2012 30 193,216 29.26 Saneamento Ambiental Águas do Brasil Full concession 2009 30 33,562 2.91 Itaquaquecetuba Mauá Águas Spat Saneamento Mogi das Cruzes Poá Iguá Saneamento PPP Water 2008 15 5,000,000 6.04 Suzano Atibaia Barueri Atibaia Saneamento Iguá Saneamento PPP Sewage 2012 30 101,043 30.48 Carapicuiba Cotia Itapevi Jandira Santana de Parnaíba Vargem Grande Paulista Birigui Campinas Aqua Pérola Sistema Produtor São Lourenço CGGC Construtora do Brasil PPP Water 2014 25 25 1,500,000 n.d. Latam Water Participações PPP Water 1994 27 0.24 BRK Ambiental Capivari BRK Ambiental Sewage asset leasing 2007 23 55,768 Campos de Jordão Araucária Saneamento GS Inima Brasil Sewage asset leasing 2010 20 52,088 i.c. Casa Branca Castilho Estiva Gerbi Guará Guaratinguetá Holambra Jáú Águas de Casa Branca Águas Castilho Águas de Estiva Gerbi Águas de Guará Guaratinguetá Saneamento Águas de Holambra Águas de Jahú Terracom Concessões e Participações Full concession 2018 30 30,380 8.08 Iguá Saneamento Full concession 2010 30 15,593 1.22 Terracom Concessões e Participações Full concession 2019 30 11,304 2.11 Latam Water Participações Iguá Saneamento Aegea Full concession 2000 25 21,347 0.57 PPP Sewage 2008 30 105,298 0.53 Full concession 2015 30 14,930 3.04 Saneamento Ambiental Águas do Brasil Full concession 2015 35 145,577 23.58 124 Jaú Municipalities Concessionaire Águas de Mandaguahy Jundiaí CSJ Companhia de Saneamento de Jundiaí Holding SGA-Sistema de Gestão Ambiental Campos Elíseos Participações. Empreendimentos e Administração e Jusante Contract model A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Contract date Term Benefited population Water concession 1998 30 150,252 Investment made in 2019 (BRL million) Sewage concession 1996 35 411,553 8.61 Participações Limeira BRK Ambiental Limeira BRK Ambiental Full concession 1995 44 296,979 78.80 SANEL - Saneamento de Luiz Antônio Saneaqua Mairinque Águas de Matão Luiz Antônio Mairinque Matão Mauá Mineiros do Tietê Mirassol Mogi Mirim Palestina Paraibuna Piquete Piracicaba Porto Feliz Porto Ferreira Ribeirão Preto Rio Claro Salto Santa Gertrudes Sumaré Santa Rita do Passa Quatro São José dos Campos São Sebastião da Grama Tuiuti Votorantim BRK Ambiental Mauá Águas de Mineiros Sanessol Sesamm Serviços de Saneamento de Mogi Mirim Empresa de Saneamento de Palestina ESAP CAEPA- Companhia de Água e Esgoto de Paraibuna Águas Piquete Águas do Mirante Águas de Porto Feliz BRK Ambiental Porto Ferreira GS Inima AMBIENT-Serviços Ambientais de Ribeirão Preto BRK Ambiental Rio Claro Sanesalto Saneamento BRK Ambiental Santa Gertrudes BRK Ambiental Sumaré Aegea BRK Ambiental Latam Water Participações Iguá Saneamento e AVIVA Ambiental GS Inima Brasil Iguá Saneamento e AVIVA Ambiental GS Inima Brasil Iguá Saneamento Aegea General Water BRK Ambiental GS Inima Brasil BRK Ambiental e Latam Water Participações Conasa Infraestrutura BRK Ambiental COMASA Companhia Águas GS Inima Brasil de Santa Rita Sanevap Saneamento do Vale do Paraíba Águas de São Sebastião da Grama Abastecimento de Água e Esgotamento Sanitário (Tuiuti) Águas de Votorantim GS Inima Brasil GS Inima Brasil Full concession 2020 35 14,770 n.d. BRK Ambiental Full concession 2010 40 47,150 Full concession 2013 30 82,702 12.72 7.66 Sewage Partial Concession 2003 40 40 439,076 4.45 Full concession 1996 30 12,985 0.44 Full concession 2007 50 30 58,328 8.60 Sewage Partial Concession 2008 30 78,495 0.22 Full concession 2007 30 30 10,540 2.54 Full concession 2015 30 13,389 5.27 Full concession 2010 30 12,791 0.84 PPP Sewage 2012 30 404,142 11.64 Water concession 2009 20 21,200 13.04 Full concession 2011 30 55,143 3.55 Sewage concession 1995 38 695,897 18.42 PPP Sewage 2007 30 205,000 4.00 Sewage concession 1996 25 117,002 0.04 Full concession 2010 30 26,898 0.87 BRK Ambiental Full concession 2014 30 279,116 38.73 Full concession 2016 30 27,557 3.59 Sewage asset leasing 2012 20 212,177 i.c. Terracom Concessões e Participações Terracom Concessões e Participações Saneamento Ambiental Águas do Brasil Full concession 2016 30 12,182 4.05 Full concession 2020 35 6,894 0.04 Full concession 2012 30 117,809 14.14 56 43 10,560,768 365.79 125#64126 PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 Municipalities Concessionaire Holding Contract model Contract date Term Benefited population Investment made in 2019 (BRL million) TOCANTINS Abreulândia Angico Abastecimento de Água (Abreuladia) Abastecimento de Água (Angico) Hidroforte Administração e Operação Water concession 2004 20 1,592 0.02 Hidroforte Administração e Operação Water concession 2015 30 2,094 0.06 Araguacema Abastecimento de Água (Araguacema) Hidroforte Administração e Operação Water concession 2016 30 3,281 0.08 Bom Jesus do Tocantins Cariri do Tocantins Chapada da Natividade Abastecimento de Água (Bom Hidroforte Administração Jesus do Tocantins) Water concession 2016 30 3,671 0.03 e Operação Abastecimento de Água (Cariri Hidroforte Administração do Tocantins) Water concession 2020 30 2,866 0.24 e Operação Chapada de Areia Dueré Goianorte Itaguatins Itapiratins Jaú do Tocantins Lizarda Abastecimento de Água (Chapada da Natividade) Abastecimento de Água (Chapada de Areia) Divinópolis do Tocantins Abastecimento de Água Fortaleza do Tabocão (Divinopolis) Abastecimento de Água (Duere) Abastecimento de Água (Fortaleza do Tabocão) Abastecimento de Água (Goianorte) Abastecimento de Água e Coleta de Esgoto (Itaguatins) Abastecimento de Água (Itapiratins) Abastecimento de Água (Jaú do Tocantins) Abastecimento de Água (Lizarda) Hidroforte Administração e Operação Water concession 2018 30 1,684 0.01 Hidroforte Administração e Operação Water concession 2018 30 787 0.04 Hidroforte Administração e Operação Hidroforte Administração e Operação Hidroforte Administração e Operação Water concession 2018 30 4,843 0.05 Water concession 2018 30 3,116 0.01 Water concession 2018 30 2,100 0.01 Hidroforte Administração e Operação Water concession 2018 30 2,852 0.04 Hidroforte Administração e Operação Full concession 2019 30 3,300 0.04 Hidroforte Administração e Operação Water concession 2019 2,047 0.01 Hidroforte Administração e Operação Water concession 2019 30 1,437 0.01 Hidroforte Administração e Operação Water concession 2019 30 30 2,593 0.03 Mateiros Abastecimento de Água (Mateiros) Hidroforte Administração Water concession 2019 30 1,709 0.00 e Operação Monte do Carmo Abastecimento de Água (Monte do Carmo) Hidroforte Administração e Operação Water concession 2019 30 30 3,409 0.03 Novo Alegre Abastecimento de Água (Novo Hidroforte Administração Alegre) Water concession 2019 30 1,733 0.02 e Operação Palmas + 46 Municípios Saneatins BRK Ambiental Full concession 1999 50 1,131,435 158.76 Pequizeiro Abastecimento de Água (Pequizeiro) Hidroforte Administração e Operação Water concession 2019 30 2,590 0.02 Pindorama do Tocantins Abastecimento de Água (Pindorama) Hidroforte Administração e Operação Water concession 2019 30 30 2,907 0.03 Pium Abastecimento de Água (Pium) Hidroforte Administração e Operação Water concession 2019 20 20 4,321 0.03 Municipalities Concessionaire Holding Ponte Alta do Bom Jesus Ponte Alta do Tocantins Porto Alegre do Tocantins Praia Norte Presidente Kennedy Rio da Conceição São Valerio da Natividade Santa Maria do Tocantins Santa Rita do Tocantins Santa Rosa do Tocantins Silvanópolis Sítio Novo do Tocantins Talismã Abastecimento de Água (Ponte Alta do Bom Jesus) Abastecimento de Água (Ponte Alta do Tocantins) Abastecimento de Água (Porto Alegre do Tocantins) Abastecimento de Água e Coleta de Esgoto (Praia Norte) Abastecimento de Água (Presidente Kennedy) Abastecimento de Água (Rio da Conceição) Abastecimento de Água Abastecimento de Água (Santa Maria) Abastecimento de Água (Santa Rita do Tocantins) Abastecimento de Água (Santa Rosa do Tocantins) Abastecimento de Água (Silvanopolis) Abastecimento de Água e Coleta de Esgoto (Sítio Novo do Tocantins) Abastecimento de Água e Coleta de Esgoto (Talismã) 389 81 n.d. i.c. Not defined, available or reported completed investments 191 35 Contract model Contract date A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Term Benefited population Investment made in 2019 (BRL million) Hidroforte Administração e Operação Hidroforte Administração e Operação Hidroforte Administração e Operação Hidroforte Administração e Operação Hidroforte Administração e Operação Hidroforte Administração e Operação Hidroforte Administração e Operação Hidroforte Administração e Operação Hidroforte Administração e Operação Hidroforte Administração e Operação Hidroforte Administração e Operação Hidroforte Administração e Operação Water concession 2019 2,528 0.01 Water concession 2019 30 5,069 0.04 Water concession 2019 30 30 2,154 0.01 Water concession 2019 30 Water concession 2019 30 20 4,919 0.06 20 3,230 0.08 Water concession 2019 30 1,956 0.02 Full concession 2020 3,410 Water concession 2019 30 2,047 0.02 Water concession 2019 30 1,020 0.01 Water concession 2019 20 20 3,115 0.02 Water concession 2019 30 4,327 0.07 Water concession 2019 30 30 6,486 0.05 Hidroforte Administração e Operação Full concession 2019 30 1,486 0.01 1,228,114 159,98 31.6 millions** 4,849.74 * Information taken from the bidding notice and/or the concession contract based on the population estimated by IBGE ** There are municipalities with more than one private operator. For these cases, it was analyzed whether there is an overlap of the beneficiary population and the amount that would generate double counting was suppressed: Jaguaruna/SC: The populations benefited by the two contracts in the municipality for covering different areas were added together. Jaú/SP: The population benefiting from the Full Concession was considered. Maceió/AL: The population benefiting from the Full Concession was considered. Mauá/SP: The population benefiting from the Water PPP was considered. 127#65PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 Methodology note Glossary SNIS SPRIS The indicators for operations and invest- ments, as shown in this publication, were calculated based on the National System of Information about Sanitation (Sistema Na- cional de Informações sobre Saneamento - SNIS) and the Information System about the Private Segment within the Sanitation Sector (Sistema de Informações do Seg- mento Privado do Setor de Saneamento - SPRIS). The main difference between the bases used was that the SPRIS includes all the information on private sector companies, including those that provide services as PPPs or through subdelegation, and those that have a contract for lease of assets. The information about these companies are not included in the base of the SNIS¹. For the calculation of the indicators, we used the standard formulas of the SNIS as shown in the Glossary below. Also using this base, we considered those companies, whether of local, microregional, or regional scope, with a judicial status of private com- pany, as being private companies². The information that is included in the SPRIS are supplied and validated by private companies, whether members of ABCON SINDCON or not, in order to measure their total participation within the sanitation sec- tor, and also the investments made by the private sector. In the glossary, the codes for such information always start with the word 'SPRIS'. ES004 ES005 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL National System of Information about Sanitation Information System about the Private Segment within the Sanitation Sector Information AG001 AG002 Total Population served by water supply Number of active water connections AG002 Number of active water connections AG005 Length of water piping network AG010 Volume of water consumed AG011 Billed water volume Unit population connections connections km 1,000 m³/year 1,000 m³/year AG019 Volume of exported treated water AG026 Urban population served by supply of running water 1,000 m³/year population ES001 Total population served by sewage treatment ES002 Number of active sewage connections population connections ES002 Number of active sewage connections connections Length of sewage network km Volume of sewage collected 1,000 m³/year ES006 Volume of sewage treated 1,000 m³/year ES007 Billed sewage volume 1,000 m³/year ES015 Volume of raw exported sewage, treated on the importer's premises 1,000 m³/year FN001 Direct operating revenue BRL/year FN017 Total expenses with services (TES) BRL/year FN033 Total investments made by the service provider BRL/year FN048 Total investments made by the municipality(ies) BRL/year FN058 Total investments made by the State BRL/year G06a G12a Resident urban population of the municipality(ies) with supply of running water Total resident population of the municipality(ies) with water supply, according to IBGE population population Methodology of Calculation Unit IN003 Total expenditure on services per m³ billed [FN017/(AG011+ES007)]*(1/1.000) BRL/m³ IN004 Average rate charged [FN001/(AG011+ES007)]*(1/1.000) BRL/m³ IN015 Sewage collection rate [ES005/(AG010-AG019)]*100 % IN023 Service rate for water network (AG026/G06a)*100 % Sewage treatment rate, with regard to water consumed [(ES006+ES015)/(AG010- AG019)]*100 % % 1 Specifically in the year 2019, the concessionaire BRK Ambiental Macaé, that operates through a PPP contract for sewage, informed SNIS that they had a full concession. For this reason, it appears on the SNIS database for this year of reference. 2- The concessionaire São Gabriel Saneamento S/A is a private company with a contract of full concession, while on the SNIS it appears as being Direct Public Administration. In our analyses, using the SNIS database, São Gabriel Saneamento S/A was considered a private company. IN046 IN055 Investment/Connection Total Investments Investment per capita* Urban water service index (AG001/G12a)*100 FN033/(AG002+ES002) (FN033+FN048+FN058) FN033/G12a * In the analyzes by contractual modality, the beneficiary population was considered. 128 BRL/year/connections BRL/year BRL/person 129#66ABOUT ABCON SINDCON#67PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 Code of Conduct A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL 25 O years abcon sindcon The Brazilian Association and National Union of the Private Concessionaires of Public Services of Water and Sewage (AB- CON SINDCON) complete 25 years old. The entity brings together private compa- nies providing water and sewage services throughout the country (14 holding compa- nies and over 120 concessionaires). The actions developed by ABCON SIND- CON aim to enable conditions for the pri- vate sector to be a protagonist in the uni- versalization of sanitation in Brazil. Generated values: • • • • Valorization of private capital in the sector Strengthening and cohesion of corporate representation Qualified knowledge, credibility and transparency Expansion of market opportunities Based on these premises, the association aims to make a decisive contribution so that private sanitation operators reach a larger and larger part of the Brazilian pop- ulation, acting with innovation and quality. All the activities of ABCON SINDCON are ruled by the Code of Conduct, which es- tablishes minimum behavior requirements that shall govern both its own activities and those of its associated companies. This Code is binding upon the ruling body, the Board of Directors, the advisors and the professionals who represent the mem- ber companies, acting on behalf of the in- stitution. All the involved people assume the obliga- tion to adhere to the specifications, based on the terms of Brazilian Legislation, act- ing in an honest and transparent manner in their relations with each other, with public authorities and civil society. The website abconsindcon.com.br pro- vides the Complaints Channel so that oc- casional non-compliance with the Code of Conduct can be reported anonymously. Strategic Planning With the external and internal changes in the sanitation sector, ABCON SINDCON have invested in carrying out the Strategic Planning to guide the actions for the repre- sentativeness of the private sector by the operators for the next three years. Internally, the entity is undergoing import- ant transformations to modernize the provi- sion of services and update itself based on their stakeholders' demands. Among these, we highlight the implementation of compli- ance and governance standards, as well as the new Compliance Code. 132 133#68134 134 PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL Actions and products Sustainability Award In 2021 the Sustainability Award, held every two years, reaches its fourth edition. The event is a reference benchmark for private concessionaires, promoting the acknowl- edgement of their professionals and inno- vative projects. Water National Conference (ENA) Held every two years, this is a congress dedicated to discussing the main issues affecting sanitation and the private sector, in its technical planning bringing together many panels in which private concession- aires share experiences and solutions. SPRIS The Sanitation Private Sector Information System (SPRIS) is designed to compile, gather and make available, to ABCON SIND- CON members and to civil society, the main indicators of private sector performance in its countrywide operations. PRÊMIO SUSTENTABILIDADE º ENCONTRO NACIONAL DAS ÁGUAS SPRIS Sistema de Informações do Segmento Privado do Setor de Saneamento Panorama This annual publication gathers data com- piled by SPRIS, as well as and other indica- tors and information relevant to the activ- ities of private concessionaires' activities within the sanitation sector. Published since 2014. Canal Magazine Brought out every four months, this online publication promotes an economic and socio-environmental review of the sector, focusing on its operators and suppliers. It also promotes the credibility of the private sector and the entity, focusing on investors and government. Sanitation Cost Calculator Also launched in 2021, this is an automated system that gathers data by State, based on the National Index of Civil Construction (Sinapi), for the establishment of prices of services, projects and works within the sec- tor, estimating costs in detail. Available to non-ABCON SINDCON on subscription. PANORAMA of the private sector's participation in sanitation revista 2021 canal " Calculadora de Custos EM SANEAMENTO 135#69PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL LEG AGE AGE AGE AGEN LEG LEG dos of dos of LE dos a dos opf AGENDA LEGISLATIVA dos operadores privados de SA SA SA SA SANEAMENTO 2 2 2 20 2021 Legislative Agenda Launched in 2021, this is a publication that brings an analysis of the main projects under way in the National Congress that have some direct relationship with the sanitation sector. Osiri 136 Sistema de Integração e Representação Institucional SIRI The Integrated System for Institutional rep- resentation (SIRI) rallies human resources in order to make sure that the discussions carried out in important Collegiate Bod- ies and Work Groups within the sanitation segment are shared with all the members, thereby making it possible to exchange in- formation that has a direct bearing on the daily activities of the concessionaires. The representation and sharing are implement- ed by the very specialists that make up the internal teams of the member companies and take part in the forums. Conjunctural Analysis In 2020, ABCON SINDCON included this new product in its portfolio. The Conjunc- ture Analyses present an economic and political approach to what happens in Bra- zilian sanitation, in Portuguese and English. Among the analyses already available, we have the study on the economic impact of the new milestone of sanitation. ABCON SINDCON News This is a monthly publication issued by the institution and aimed at companies active in the segment, investors, and suppliers. It brings the main news of the market and of sanitation regulation, as well as the sched- ule of Association activities. This publica- tion is sent by e-mail and hosted on the AB- CON SINDCON website. Management Thematic Committees ABCON SINDCON has internal committees composed of its members, seeking to ex- change experiences between companies and meet external demands, to add value to the requested intermediation. The Legal, Análises ② Conjunturais abcon (sindcon NEWS Compliance, Financial, Communication, Hu- man Resources, Technical and Quality and Safety committees are responsible for con- tributing with debates and for forwarding proposals concerning the issues that affect the activity of concessionaires and the sector. 137#70PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 ABCON SINDCON Members List • Aegea Saneamento e Participações 138 • Agreste Saneamento . Aguas Alta Floresta . Aguas de Andradina . Aguas Canarana • Aguas de Castilho Aguas Colider Aguas Comodoro Aguas Cuiabá Águas das Agulhas Negras • Águas de Araçoiaba . • Aguas de Ariquemes Saneamento Aguas de Barra dos Garças Águas de Bombinhas Saneamento Aguas de Camboriu Saneamento . Aguas de Buritis • • Águas de Campo Verde . Aguas de Carlinda Aguas de Casa Branca Águas de Cláudia • Águas de Niterói • • . . Aguas de Nortelândia Aguas de Nova Friburgo Águas de Novo Progresso Águas de Pará de Minas • Águas de Paranatinga • • • • • • • Águas de Paraty Aguas de Pedra Preta Aguas de Peixoto de Azevedo Aguas de Penha Saneamento Águas de Pimenta Bueno Saneamento Aguas de Poconé Aguas de Porto Esperidião . Aguas de Primavera • Aguas de Rolim de Moura Águas de Santa Carmen Águas de São Francisco Aguas de São Francisco do Sul Aguas de São José do Rio Claro Águas de São Sebastião da Grama Aguas de Timon Saneamento • Aguas de Confresa • Aguas de Diamantino • Águas de Sinop • Aguas de Estiva Gerbi • Aguas de Sorriso • Aguas de Guará • • Águas de Guarantã • Aguas de Tuiuti • Aguas de Holambra Saneamento • Aguas de União do Sul • Águas de Jaguaruna • Aguas de Vera • Aguas de Jahu • Aguas de Vila Velha Ambiental • Aguas de Jangada . Águas de Votorantim • • Águas de Jauru Abastecimento e Distribuição Águas de Juturnaíba . Águas do Imperador • Águas do Mirante • Aguas do Paraíba Aguas Guariroba Aguas de Manaus Águas de Mandaguahy Aguas de Marcelândia • Aguas de Matão . Allonda Ambiental Águas de Matupá • Águas de Mineiros do Tietê Águas Piquete Águas Pontes e Lacerda Ambient Serviços Ambientais de Ribeirão Preto • • Ambiental Saneamento e Participações Aqua Pérola Araucária Saneamento • Atibaia Saneamento • Atlantis Saneamento • Aviva Ambiental • BRK Ambiental Araguaia Saneamento · BRK Ambiental Blumenau · BRK Ambiental Caçador • BRK Ambiental Cachoeiro do Itapemirim • BRK Ambiental Capivari BRK Ambiental de Macaé • BRK Ambiental Goiás • BRK Ambiental Jaguaribe • BRK Ambiental Limeira • BRK Ambiental Manso • • BRK Ambiental Maranhão • BRK Ambiental Mauá • • BRK Ambiental Oceanpact ⋅ BRK Ambiental Otacilio Costa . • BRK Ambiental Participações . • BRK Ambiental Porto Ferreira BRK Ambiental Região Metropolitana de Recife Goiana BRK Ambiental Rio Claro A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL • • . • ⋅ . • • • • Palestina Gaivota Saneamento General Water Gravatal Saneamento GS INIMA Brasil GSS Gestão de Sistemas de - Saneamento Guaratinguetá Saneamento Hydrosistem Engenharia Iguá Saneamento Itapoá Saneamento Jaguaruna Saneamento Latam Water Participações • • Mauá Águas Orbis Ambiental Paranaguá Saneamento Perenge Engenharia e Concessões Prólagos Saab Saneamento Ambiental Águas do Brasil Samar Soluções Ambientais de Araçatuba Sanama Saneamento Alta Maceió Saneaqua Mairinque . Saneatins Companhia de - Saneamento do Tocantins SANEJ Saneamento de Jaú Saneouro Conc. de Tratamento de Água e Esgoto Sanessol - Saneamento de Mirassol Sanevap Saneamento do Vale do Paraíba São Gabriel Saneamento SESAMM Serviços de Saneamento . de Mogi Mirim • • . . Spat Saneamento Tera Ambiental Terracom Concessões e Participações Tubarão Saneamento Veolia Serviços Ambientais Ý Soluções Integradas de Saneamento (Y Sanso) Zona Oeste Mais Saneamento . • BRK Ambiental Rio das Ostras • BRK Ambiental Santa Gertrudes • BRK Ambiental Sumaré . . BRK Ambiental Uruguaiana • • • CAEPA Companhia de Águas e Esgoto de Paraibuna COMASA Companhia de Águas de Santa Rita Concessionária de Saneamento Serra Ambiental Consórcio Cembra Gerconsult CSJ Companhia de Saneamento de Jundiaí Empresa de Participações Em Enops Engenharia • • Projetos de Saneamento . • - ESAP Empresa de Saneamento de 139#71PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 A NEW SOCIAL AND ECONOMIC FRONTIER FOR BRAZIL ABCON SINDCON Governance ABCON Board of Directors President Teresa Cristina Querino Vernaglia (BRK Ambiental Participações) Vice-Presidents Rogério de Paula Tavares (Aegea Saneamento e Participações), Claudio Bechara Abduche (SAAB - Saneamento Ambiental Águas do Brasil), Carlos Augusto Machado Pereira de Almeida Brandão (Iguá Saneamento), Paulo Roberto de Oliveira (GS Inima Brasil), Fernando Evanyr Borges da Fonseca (Terracom Concessões e Participações), Ney Lopes Moreira Castro (Empresa de Participações em Projetos de Saneamento), Alexandre Ferreira Lopes (Aviva Ambiental) e Paulo Eduardo Raposo (Perenge Engenharia e Concessões). Substitutes Daniela Mattos Sandoval Coli (BRK Ambi- ental Participações), Yaroslav Memrava Neto (Aegea Saneamento e Participações), Bernardo Machado Alves Gonçalves (SAAB - Saneamento Ambiental Águas do Brasil), Talita Caliman (Iguá Saneamento), Roberto de Oliveira Muniz (GS Inima Brasil), Ales- sandro José Conte Hidalgo (Terracom Con- cessões e Participações), Sandra Molinero (Empresa de Participações em Projetos de Saneamento), Carlos José Botelho Beren- hauser (Aviva Ambiental) e Paula Regina Fujisawa Raposo Valente (Perenge Engen- haria e Concessões). Audit Committee Alessandro Jose Conte Hidalgo (Terracom Concessões e Participações), Gustavo Af- fonso Pereira Coelho (Iguá Saneamento) e Vaney lori (Aviva Ambiental). SINDCON Board of Directors President Teresa Cristina Querino Vernaglia (BRK Ambiental Participações) Vice-Presidents Arlindo Sales Pinto (Aegea Saneamento e Participações), Bernardo Machado Alves Gonçalves (SAAB - Saneamento Ambiental Águas do Brasil), Carlos Augusto Machado Pereira de Almeida Brandão (Iguá Sanea- Technical Committee mento), Giuliano Vito Dragone (GS Inima Brasil), Fernando Evanyr Borges da Fonse- ca (Terracom Concessões e Participações), Ney Lopes Moreira Castro (Empresa de Participações em Projetos de Saneamen- to), Vaney lori (Aviva Ambiental) e Paulo Eduardo Raposo (Perenge Engenharia e Concessões). Substitutes Pedro Henrique Teixeira Fiorelli (BRK Am- biental Participações), Yaroslav Memrava Neto (Aegea Saneamento e Participações), Claudio Bechara Abduche (SAAB - Sanea- mento Ambiental Águas do Brasil), Talita Caliman (Iguá Saneamento), Carlos Ro- berto Ferreira (GS Inima Brasil), Alessan- dro José Conte Hidalgo (Terracom Con- cessões e Participações), Sandra Molinero (Empresa de Participações em Projetos de Saneamento), Alexandre Ferreira Lopes (Aviva Ambiental) e Paula Regina Fujisa- wa Raposo Valente (Perenge Engenharia e Concessões). Audit Committee Gustavo Affonso Pereira Coelho (Iguá San- eamento), Heraldo José de Lima (Gs Inima Brasil) e Ronaldo Oller Tossi (SAAB - Sanea- mento Ambiental Águas do Brasil). Maria Clarisse Beloso Garcia Silvestre (Gs Inima Brasil), André Lermontov (Águas do Imperador), Luiz Pannutti Carra (CSJ - Companhia de Saneamento de Jundiaí), Nelson Ricardo da Silva Carvalho (Águas do Paraíba), Eduardo Berrettini (Samar Soluções Ambientais de Araçatuba), Fer- nando Humphreys (Aesan Engenharia e Participações), Guillermo Deluca (Aegea Saneamento e Participações), Ricardo Bar- bosa dos Santos (Aviva Ambiental), Lean- dro Marin Ramos da Silva (Aegea Sanea- mento e Participações), Paula Alessandra Bonin Costa Violante (Iguá Saneamento), Giancarlo Marcus Ronconi (BRK Ambiental Participações), Alexandre Dell Aquila Cit- varas (Veolia Serviços Ambientais), Tiago Ramos Eyng (Atlantis Saneamento), Caio Garcia da Cunha (Iguá Saneamento) e Ana Paula Fernandes Abrahão (CSJ - Compan- hia de Saneamento de Jundiaí). 140 141#72PANORAMA OF THE PRIVATE SECTOR'S PARTICIPATION IN SANITATION 2021 Staff List CEO and Executive Director Percy Soares Neto Technical Superintendent Ilana Ferreira Operational Technician Cesar Seara Julia Souza Priscila Bezerra Financial Eliana Gonçalves Buratto Administrative Elaine Cristina das Chagas Legal Coordinator Kelly Félix Communications Coordinator Mariana Zito Trainee Mariana Emídio Press Relations and Communication Advisors Ana Rizzo Comunicação e Engajamento Em Foco Assessoria de Comunicação Legal Assistance Lacaz Martins, Pereira Neto, Gurevich & Schoueri Advogados Parliamentary Advisors BMJ Consultores This publication, the PANORAMA of Pri- vate Participation in the Sanitation Sector in Brazil 2021, is a publication of the As- sociation and Trade Union of Private Con- cessionaires of Public Water and Sewage Services ABCONSINDCON (Associação e Sindicato Nacional das Concessionárias Privadas de Serviços Públicos de Água e Esgoto). - Reproduction of this text is permitted, pro- vided the source is mentioned. Executive Coordination Percy Soares Neto Technical Production Ilana Ferreira Priscila Bezerra Julia Souza Editorial Production Aurea Figueira Daiana Felix Mariana Zito Nelson Lourenço English Translation and Review Nativa Translations DTP Mariana Zito Mariana Emídio Infographics Mariana Zito Date of Publication July 2021 142#7325abcon years sindcon