BNDES to finance majority of Rio sanitation concessionaires' investments

Brazilian development bank BNDES is to play a key role in financing the planned concessions for water and sanitation services in Rio de Janeiro state. The lender said it would provide up to 55% of the amount expected to be invested in the concession.

The concessions are expected to generate investments and fees of BRL40.6 billion ($7.1 billion), some BRL30 billion in investments and BRL10.6 billion in fees. BNDES said that it also will provide financing for the fees but limited to 30%. The auction for the services currently provided by state water utility Cedae is planned for 30 April. The four concessions on offer will cover 12.8 million consumers, representing about 90% of Cedae’s customers. BNDES said it is also working to attract other banks to help finance the rest of the investments.

Major banks and leaders in project finance in Brazil, such as Banco Santander, Itau BBA and BTG Pactual, are looking at providing financing for players interested in the concession, according to multiple sources.