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Investor Presentaiton

PANORAMA 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
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