Expansion of private providers and advanced regionalization: the highlights of the sanitation sector in 2024
A new IAS report examines the national scenario in detail: four years after the approval of the Legal Framework, Brazil has new forms of regional management, an increase in private providers and a renewal of state companies
Published in 26 Jun 2024
Written by By the IAS team
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The review of the Sanitation Legal Framework, approved by the Brazilian Congress in July 2020, brought about profound changes in the sector. With the law now nearly four years old, IAS has unveiled the New 2024 Sanitation Chart, an unprecedented survey on the broad changes that the area has been undergoing. The full report can be downloaded here.
IAS analysts have pored over data and documents from a variety of public and private agents to produce a chart that covers the whole of Brazil. The report is part of IAS's mission since its foundation: to collect and systematize information on sanitation throughout Brazil.
The review includes updated data on the regionalization of sanitation services under the responsibility of the states; processes for including the private sector, such as concessions, Public-Private Partnerships (PPPs) and privatizations; adaptation of state-owned companies to the new rules; and a description of the profile of providers, including the 2022 information from the National Sanitation Information System (SNIS), the most recent one available.
Some of the data provided by the survey:
- In 2024, 23 Brazilian states approved regionalization laws, resulting in 78 sanitation regions. Of these, only 44 were effectively implemented.Bahia, a state that began approving sanitation microregions even before the approval of the Legal Framework, now has all of its regional bodies in place and four of them with approved regional plans. At the other end of the spectrum, the states of Pará, Acre, Sergipe and Tocantins took advantage of the extension of the deadlines to approve regionalization laws and their bodies by the end of 2023.
- Regionalization provides for the division of the state into groups of municipalities. What can be seen is that seven states transformed with their laws the entire territory into a single sanitation region. This is the case of Amazonas, which became a single microregion.
- Eighteen Brazilian states have regional concessions in progress or concluded.There are three main formats for the private sector to be included in the provision of water and sewage services: full concessions of services; PPPs signed with state companies; and privatizations of state companies. There are eleven states with ongoing processes scheduled for 2026.
- The changes in the Legal Framework also forced the State Companies to take action. The Sanitation State Companies (CESBs) responsible for serving 3,773 municipalities with water and 1,433 with sewage had to adapt their contracts to the 2033 universalization goals and prove that they have the economic and financial capacity to do so. The survey shows that of the 24 CESBs, three (Amazonas, Roraima and Piauí) did not present the documentation proving this, and all of their contracts are irregular in terms of the Legal Framework;
- A new feature of the 2022 SNIS survey is the inclusion of community associations as providers of water supply services in rural areas – such as Sisar in Ceará and Centrais in Bahia. These associations serve 189 municipalities and 800,000 people in rural areas.
- The survey highlights the change in the profile of the service, with an increase in the population served by private companies. In 2022 the private sector was already responsible for serving 139 municipalities, representing a total of 26.5 million people. With the privatization of Corsan already completed, and, if the privatization of Sabesp (Water and Sewage Service Provider) is completed, in 2024 private providers will be responsible for more than a thousand municipalities and 60 million people.
- In this scenario, those which have not taken action may have restrictions to access federal resources: municipalities not included in the regionalizations or that have decided not to join a region; states such as Minas Gerais that have not approved laws or those such as Rio de Janeiro that have not included all municipalities in the regionalization; and also State Sanitation Companies that have not proven their economic and financial capacity to meet the 2033 goals.