Driving Performance at Brazil’s National Agency for Water and Basic Sanitation

2. Institutional and sector context

Abstract

This chapter provides an overview of Brazil’s public institutions and describes the main features of the water resources management and water supply and sanitation sectors, as well as the legislative framework that determines the functions of Brazil’s National Agency for Water and Basic Sanitation (Agência Nacional de Águas e Saneamento Básico - ANA).

Introduction

This chapter presents an overview of the institutional framework in Brazil and legislation on water resource management (WRM) and water supply and sanitation (WSS). It maps how policy has evolved over time – as well as providing information on the structure and performance of the water and sanitation services sector.

Brazil is a large, diverse country dealing with many challenges that affect the development of WRM and WSS policy and regulation. Brazil is characterised by social inequality, geographical and cultural differences between its regions, and low capacity to pay for services (OECD, 2022[1]). Economic crisis and the COVID-19 pandemic have intensified many of these characteristics. Additionally, the high volume of actors at different levels of government, the uneven capacity of those actors, and a policy preference for decentralised and participative decision-making in WRM and WSS results in a complex, multi-level environment that regulatory authorities need to navigate.

Brazil is water-rich, but this wealth is unevenly distributed. The Amazon, Paraná and São Francisco rivers are some of the world’s largest water basins. However, there is a mismatch between water sources and water use, with the Amazon rainforest in the sparsely populated North and Centre-West regions, while the developed coast includes the agricultural but semi-arid Northeast and the industrialised population centres of the South and Southeast (OECD, 2022[1]).

Regarding water supply and sanitation, despite refocused efforts, Brazil shows some distance to national and international goals to achieve universal service coverage. Around 16% of Brazil’s population lack access to safely managed drinking water whilst 44% of the population lacks basic sanitation services (sewage collection and treatment) (see Sector overview) (SNIS, 2021[2]). The largest deficits are in the North and Northeast of the country, in particular across indigenous villages, urban peripheries and informal settlements (favelas) (SIWI/UNICEF/World Bank, 2020[3]). Rural areas in Brazil also present a challenge, where only 62.9% of the population uses basic sanitation services compared to 94% in urban areas.

Beyond the challenges posed by improving access to essential services for an increasing population, various social, economic, and environmental trends in Brazil create significant security and infrastructure challenges, which compound risks and complicate regulatory decision-making. Actors in the water and sanitation services sector need to consider risks arising due to developing trends, such as extreme climate and weather, population growth, deforestation, and urbanisation. This is true for actors involved in the water and sanitation network but also for stakeholders in other productive sectors like food and energy, who strongly depend on water availability for the performance of their sectors.

Boosting resilience to the risks related to these trends, which include more frequent and severe climate water-related events, such as droughts and floods, the depletion of hydropower reservoirs, increased water pollution around urban centres, and worsening access to services for rural populations and informal settlements, is discussed at length in the OECD’s report Fostering Water Resilience in Brazil: Turning Strategy into Action (OECD, 2022[1]).

Brazil’s institutional framework

Brazil is a presidential federated republic, which the Constitution (1988) defines as formed by four types of autonomous federated entities: the Union, 26 states, 5 570 municipalities and one federal district (the capital, Brasilia). The authorities and bodies of the Union represent the federal state, namely the President, Vice-President and National Congress, whereas Brasilia (the federal district) and the individual Brazilian states have their own elected governors and legislative chambers, with a significant and influential level of delegated power relative to the federal government. At the local level, municipalities also have delegated powers under the constitution regarding legislative, governmental and administrative capacities. The Constitution establishes the principle of the separation of powers of the Union into legislative, executive and judiciary (Supremo Tribunal Federal, 2022[4]) (European Parliamentary Research Service, 2021[5]).

Legislative branch

The National Congress (Congresso Nacional) is a bi-cameral parliament consisting of the Chamber of Deputies (Câmara dos Deputados) and the Federal Senate (Senado Federal). The Congress is the primary law-making authority responsible for setting out general policy frameworks and principles in primary legislation, whilst the executive branch typically takes responsibility for developing secondary legislation.

In accordance with the Administrative Procedure Law (Law No. 9.784, 1999[6]), the Congress can mandate or authorise federal regulators, including ANA, to edit and issue resolutions. It can also request opinions on draft legislative proposals or responses to official questions raised by representatives. There are a number of permanent committees covering subjects which either directly or indirectly relate to water and sanitation, or sector regulation, for example: the Environment and Sustainable Development Committee; the Consumer Protection Committee; the Mines and Energy Committee; the National Integration, Regional, and Amazon Development Committee; the Agriculture, Livestock, Supply and Rural Development Committee; and the Urban Development Committee. Whilst the performance of federal regulators may be widely discussed within Congress, the committee structure does not hold a formal role in the evaluation of federal regulatory agencies – a role which is undertaken by the Federal Court of Accounts (Tribunal de Contas da União, TCU). Instead, committees develop policy proposals, which can indirectly impact the regulatory landscape, and may require input or reaction by federal regulators.

Executive branch

The President of the Republic is head of both state and government, and together with the Vice-President is elected by universal suffrage, with a four-year mandate. The President appoints the Council of Ministers, the primary consultative body to the executive together with the National Defence Council, Attorney-General, and Council of the Republic.

The Ministry of Integration and Regional Development (MIDR) has oversight of ANA, whilst both the MIDR and the Ministry of Cities (MCIDADES) are, at the time of writing, the two ministries responsible for developing policy in, respectively, WRM and WSS – the two sectors where ANA holds regulatory duties.

The newly formed Ministry of Finance (MF), Ministry of Planning and Budget (MPO), and Ministry of Management and Innovation in Public Services (MGISP),1 are responsible for overseeing ANA’s budget and financial resource management. Several other ministries remain important for the water and sanitation services sector due to cross-sectoral linkages or dependencies relating to objectives, processes, and outcomes. These other ministries include the Ministry of Agriculture, Ministry of Environment and Climate Change, and the Ministry of Mines and Energy, which, despite a lack of formal governance relationships with ANA in legislation, may be influential due to policy decisions made regarding, for example, energy transition, environmental resilience, infrastructure, and agricultural development.

The National Water Resources Council is chaired by the Minister of Integration and Regional Development and is formally the entity which co-ordinates and directs the National Water Resources Policy (Política Nacional de Recursos Hídricos, PNRH), whilst ANA is responsible for its implementation. In practice decision-making in the Council is participative, involving government (including ANA), water resource users and civil society, however the Council’s activities are on hold at the current time pending restructure under the new presidency. Furthermore, at the time of writing, executive responsibility for the National Water Resources Policy (PNRH) is undefined, following a Presidential veto of its return to the MIDR.

The Inter-Ministerial Sanitation Committee (CISB), under the presidency of MCIDADES, oversees the implementation and co-ordination of federal sanitation policy (see Chapter 3).

Judicial branch

The Supreme Federal Court (Supremo Tribunal Federal, STF) is the highest judicial body in Brazil tasked with safeguarding the Constitution, whereas the Supreme Court of Justice (Superior Tribunal de Justiҫa, STJ) is responsible for ensuring the uniform interpretation of federal law throughout the country. Underneath these courts sit the courts of the federal justice system (state, federal district, and regional courts), responsible for prosecuting and judging cases on behalf of the Union, autonomous entities or federal public companies, acting as plaintiffs.

Other independent bodies

The Federal Court of Accounts (Tribunal de Contas da União, TCU), audits the accounts of administrators, including regulatory bodies, and other entities responsible for federal public funds and assets. This autonomous, administrative authority is provided by the Constitution (Supremo Tribunal Federal, 2022[4]). As such, the TCU may scrutinise the performance and accounts of ANA (see Chapter 3).

State and local government

Brazil’s federation is made up of 26 states and the federal district. At the state level, the executive power sits with governors and vice-governors, who are supported by a legislative assembly of state deputies. At the local level, municipalities are governed by mayors and deputy mayors and a legislative body of municipal councillors. State and municipal governments can define regulatory measures within their area, noting only state governments, not municipal authorities, hold responsibilities for water resource management.

The nature and extent of the interaction between federal, state, and municipal levels, which is largely determined by legislation, varies depending on whether an issue relates to water resource management, or water supply and sanitation services, which are governed by separate legislative frameworks (see Sector reform). In the case of water resource management, one factor determining the involvement, or not, of federal institutions is the location of the body of water and its use.

Sector reform

Brazil has witnessed rapid institutional development and reform, with recent legislation focusing on developing the legal framework and operations of both the WRM and the WSS sectors.

The overall direction of legislation has been to promote, and provide the means to achieve, increased access to water supply and sanitation services, or otherwise to develop and clarify the institutional or operational frameworks that govern WRM and WSS across federal, state, and municipal levels. More recently, focus has turned to regulatory standardisation and the centralisation of oversight, and management, in the interests of both increasing the effectiveness of policy, and efficiency in its implementation.

Water resource management and dam safety reform

Following the establishment of Brazil’s Constitution in 1988, a set of new laws and federal programmes from 1997 to 2019 aimed to establish the National Water Resources Policy and develop water resource management, water services provision and dam safety in Brazil. During this period, in 2000, the National Water Agency (ANA) was created to support the maturing sector - a key moment of institutional evolution.

Brazil’s Federal Constitution

The federal constitution established the legal framework for water management by recognising water as a public asset and declaring it as a collective right for present and future generations. The constitution states that the use of water resources must be based on the principles of sustainable development, environmental protection, and social equity (Supremo Tribunal Federal, 2022[4]).

Providing the basis for the implementation of these principles, the National Water Resources Policy (PNRH) created the concept of water basins as the territorial units for WRM, allowing local conditions and needs to be considered and fed into the policy development process. The constitution also established, in general terms, the need for the National Water Resources Management System (Sistema Nacional de Gerenciamento de Recursos Hídricos, SINGREH). In doing so, the constitution’s provisions have laid the foundation for legal reforms discussed in more detail below.

Water Resources Law, 1997

Following the principles set out in the constitution, the Water Resources Law (Law No. 9.433, 1997[7]) provides more detailed guidelines and regulations for the use, conservation, and protection of water resources in Brazil. The legislation established a system of water rights and enabled the collection of water charges for the use of water resources.2 The law emphasised the importance of participatory decision-making by establishing Basin Committees (Comitês de Bacias), an institutional representation of the water basin communities, and requires Water Management Plans (Planos de Recursos Hídricos) to be developed and implemented at the basin level through a participatory and representative process. Finally, the law emphasises environmental protection and sets standards for water quality, ecosystem preservation, and the prevention of pollution, introducing measures to control and mitigate activities that may have a negative impact in these areas.

In Brazil, river basin committees are provided with strong deliberative powers, but in most cases have limited capacity for implementation, which contrasts with the role played by similar institutions in other countries, where basin committees build consensus on priorities and planning but lack decision-making powers.

The PNRH, as further defined, provides the objectives, strategies, and instruments for the sustainable and integrated use, conservation, and protection of water resources. The same law created the SINGREH, which is a network of institutions responsible for the co-ordinated enforcement of the WRM framework in Brazil, including federal and state agencies, as well as the water management councils at the basin level.

Establishment of the National Water Agency (ANA), 2000

The National Water Agency (ANA) was established in 2000 by Law No. 9.984/2000, which created ANA as an autonomous regulatory agency responsible for water resource management at the national level. The establishing legislation grants ANA the power to establish guidelines, regulations and standards for the use, conservation, and protection of water resources, and defines ANA’s mandate (Law No. 9.984, 2000[8]). Various legislative acts have amended ANA’s establishing legislation since 2000 and added responsibilities.3

The creation of ANA was an important step in co-ordinating and implementing water resource management after earlier legislation had delivered a decentralised system in line with the society’s needs to enhance localised, bottom-up decision making during the democratic transition (OECD, 2022).

After the establishment of ANA, SINGREH would incorporate the National Council of Water Resources (Conselho Nacional de Recursos Hídricos, CNRH); ANA; the state councils of water resources; the basin committees; federal, state, and municipal institutions responsible for water resource management, and water agencies.

National Policy on Dam Safety, 2010

Law No. 12.334/2010 established the National Policy on Dam Safety (Política Nacional de Seguranҫa de Barragens) and provided a comprehensive framework for dam safety at the federal level. Guidelines and regulations on the inspection, monitoring, and safety of dams are provided by this legislation, which also empowers regulatory agencies such as ANA to establish further regulation, conduct inspections, and enforce compliance. The law aims to prevent accidents, mitigate risks, and ensure the safety of people and the environment connected to dam structures (Law No. 12.334, 2010[9]).

ANA is responsible for implementing and enforcing the National Policy which, aside from inspections and enforcement action, involves responsibilities for dam classification, and the provision of technical assistance and capacity-building of dam owners, operators, and other regulatory agencies (see Chapter 3).

Programme Progestão, 2013

Following the 2011 National Pact for Water Governance, the Progestão programme was instituted in 2013 to help strengthen water resources management and promote co-ordination at the state level and provide flexibility to address situations and capacity that vary from state to state. It sets partnership agreements between ANA and the state and federal district water resource management institutions, including the state water resource councils and state water executive agencies, to develop capacity and capabilities and better integrate the National Water Resources Management System (SINGREH) and the state water resources management systems (SEGREHs) (ANA, 2011[10]).

The first support phase of Progestão was launched in 2013. The programme included the payment of up to five instalments of $750 000 BRL (154 000 USD) per year, for each state, subject to the fulfilment of pre-established institutional goals. For the second phase of Progestão, the annual instalment increased to $1 million BRL (206 000 USD) (ANA, 2011[11]), and for the third phase, launched on December 2022, it increased to $1.4 million BRL (USD 288 400).

National Water Security Plan and Water Security Programme, 2019

The 2019 National Water Security Plan (Plano Nacional de Seguranҫa Hídrica, PNSH) aims to strengthen the country’s water security by addressing challenges related to water availability, quality, and resilience. The plan involves strategic infrastructure investments totalling approximately BRL 27.6 billion per year (7.2 billion USD at 2019 rates) from 2019 to 2035 (ANA, 2019[12]).

The 2019 Water Security Programme (Programa de Segurança Hídrica, PSH) attached to the PNSH effectively doubled the level of investment in water infrastructure. As of July 2022, 2% of projects under the PSH were completed, 48% are under construction, 3% are out for bidding, 17% have concluded the planning stage, 21% are in the planning phase, and 7% are on hold. The Union's support in the implementation of fully qualified interventions in the PSH represents a total investment of $18.03 billion BRL (3.7 billion USD), of which 79% has already been disbursed (ANA, 2022[13]).

National Pact for Water Governance, 2023

The National Pact for Water Governance aims to strengthen the institutional relationship between ANA and the states and federal district. At the current time of writing, 23 states have signed up to the pact, which focuses on specific objectives in each of ANA’s three business areas – water resources management, the regulation of sanitation services, and water infrastructure, including dam safety.4 The Pact will be formalised through “Terms of Adhesion”, but is founded on the principle of co-operation already provided for in legislation, for example under the National Water Resources Policy, the new sanitation framework, and the National Dam Safety Policy.

Water supply and sanitation reform

Following earlier efforts to manage the water supply and sanitation challenge through large state-led infrastructure programmes and then decentralised, less co-ordinated action at the municipal level, the General Sanitation Law established comprehensive guidelines, principles, and targets for the sector. In 2020, the Sanitation Law renewed this effort, at the same time introducing new tasks, assigned to ANA, to develop national reference standards to guide subnational regulatory agencies and supervisory bodies towards standardised best practices.

General Sanitation Law, 2007

The General Sanitation Law (Law No. 11.445, 2007[14]) established guidelines and principles for comprehensive sanitation services. The law represented a significant shift and improvement compared to earlier legislation on sanitation for several reasons: the law provided a comprehensive approach instead of addressing isolated sanitation issues; it focused on universal access to safe water supply, sanitation facilities and proper waste management; the law promoted citizen participation and social control in decision-making processes; it established a more comprehensive regulatory framework by creating regulatory agencies at different levels of government; and it encouraged public-private partnership as a means to improve service efficiency and effectiveness.

The General Sanitation Law defined basic sanitation as comprising four services: drinking water supply; sewage (or wastewater) collection and treatment; urban cleaning services and solid waste management; and urban rainwater drainage and management. It also establishes the Inter-Ministerial Committee for Basic Sanitation (CISB), which as a co-ordinating body for water supply and sanitation policy at the federal level, became an important stakeholder for ANA after the 2020 Sanitation Law extended the agency’s mandate.

Sanitation Law, 2020

The 2020 Sanitation Law, or “New Legal Framework for Basic Sanitation” (Law No. 14.026, 2020[15]), is the most recent piece of federal legislation to introduce reforms to Brazil’s sanitation sector. The legislation’s primary objectives are to achieve universal access and promote proper sanitation practices and water quality monitoring in the interests of public health and the environment. Whilst the law covers similar aspects as the General Sanitation Law (for example the promotion of universal access, the regulatory framework, and public-private partnerships), the 2020 legislation adapts the focus of earlier approaches and addresses new topics, such as regional collaboration.

The law introduces a more precise set of targets for making progress toward universal access, deadlines for the achievement of the targets, and requirements for regular monitoring and progress reporting. Regarding universal access, all networked urban and rural areas should have continuous access to safe drinking water by July 2033, which represents access for 99% of the population. For sewage services all urban areas should have access to sewage collection and treatment services, representing coverage for approximately 90% of the country’s population.

The new legal framework includes an expansion of ANA’s mandate into the WSS sector – introducing responsibilities for the definition of reference standards for water and sanitation and monitoring their adoption by subnational regulatory authorities (see Chapter 3). This is an important change for the sector, since under the previous framework, water supply and sanitation services were regulated locally without federal direction.

The law stresses certain processes or outcomes as important for realising the legislation’s primary objectives. Those processes or outcomes include the regionalisation process noted below, but also the enhancement of private sector participation, and the harmonisation of approaches and standards by subnational regulatory authorities. This outcome concerns the ANA-issued reference standards, which can be supported by ANA-led capacity building efforts (see Chapter 3).

Another revisited topic in the 2020 legislation is tariff regulation and social assistance. The law introduces measures to ensure fair and affordable tariffs for users and emphasises the importance of social assistance programmes to guarantee access to basic sanitation services for more vulnerable segments of the population.

The Sanitation Law places increased emphasis on attracting private investments in the sanitation sector. It aims to provide greater legal certainty and promotes the use of public-private partnerships to drive innovation and efficiency. In the interest of optimising resources and increasing efficiency, the law also promotes regional collaboration and the formation of consortia, or “blocks”, among municipalities. This formation of consortia, referred to as the “regionalisation” of provision, aims to achieve economies of scale, and is incentivised through prioritised access to federal investment. At the same time, competition conditions are improved by new rules around contract renewal and the prohibition of “programme” contracts (Smiderle et al. 2020).

Five separate decrees accompany the new legal framework and provide additional guidelines on aspects of inter-ministerial governance (Decree No. 10.430, 2020[16]), the federal government’s support to states and municipalities (Decree No. 10.588, 2020[17]), required evidence of the financial capacity of potential service providers (Decree No. 10.710, 2021[18]) and the methodology to be used (Decree No. 11.598, 2023[19]), and support for the regionalised provision of public sanitation services (Decree No. 11.599, 2023[20]).

Sector overview

The WRM and WSS sectors within which ANA operates are complex, vast in scale, and are grappling with considerable challenges as signalled in the introduction to this Chapter. The two sectors are connected, since water supply and sanitation represents one source of demand on water resources, but the two sectors have evolved at different rates and face very different challenges today in terms of sustainability, efficiency, and the gap to bridge to stated policy objectives.

Water resource management

Before water is consumed it must be withdrawn from freshwater or groundwater resources, which fall under either state or federal supervision5, and transported. The wholesale market for bulk water use, in which water supply and sanitation is just one use-case contributing to demand, is regulated through the allocation of water rights and the levying of water charges.

ANA’s role in water resource management is summarised in more detail in Chapter 2, whilst a more detailed analysis of water charging, including an overview of the economic principles and the state of play in Brazil, is available in Water Charges in Brazil: The Way Forward (OECD, 2017[21]).

Water abstraction and pollution charges

The water charge (cobrança) is a price for the use of a common resource. The objective of charging is to ensure water is appropriately valued, so that usage is rationalised, efficiency incentivised, and, where earmarking processes are in place, funds are raised to enable investment which, among other things, can preserve water quality and resource availability. All permit holders (outorgas) are subject to water charges. Permits are normally applicable to water withdrawal for economic purposes, meaning the sectors subject to charges in Brazil are more likely to constitute water supply and sanitation utilities, industry, hydropower and agriculture.6

Water charges are not applicable everywhere in Brazil and the introduction of water charging is an ongoing process. This process is promoted and supported by ANA for basins in the Union’s domain, but ultimately implemented by basin committees. Charging requires a place-based approach depending on states and basins’ exposure to water-related risks. Water charges are in place in the Southeast and in the Northeast of Brazil – those areas where water is more scarce. The Southeast is the richest region in Brazil but suffers from water pollution, especially in urbanised and industrialised metropolitan areas. The Northeast is a poorer region with only 3% of total available water sources but 29% of the total population (SNIS, 2021[2]) (OECD, 2022[1]).

The process for setting and implementing water charges at federal and state level is similar across the country. Basin committees at the federal or state level submit charging plans for approval to the federal (Conselho Nacional de Recursos Hídricos, CNRH) or state (Conselhos Estaduais de Recursos Hídricos, CEHRs) water resources councils. Federal (ANA) or state water management agencies (e.g. executive bodies of State Secretariats for the Environment) take responsibility for charge collection, and institutions that act as water agencies (in the form of private organisations, associations, foundations, consortia) manage revenues, which are spent in the basins according the river basin plans (OECD, 2017[21]).

Demand on water resources

Brazil, due to its large population (Table 2.1), is inevitably a large water resource user, withdrawing 67.2 Gm³ per year, more than double the volume of France or Colombia (Table 2.2). However, withdrawal per capita is much lower than both neighbouring countries (Argentina and Colombia) and OECD reference countries (France and the United States) (FAO, 2020[22]).

Table 2.1. Overview of Brazil's regions

Region	Number of municipalities	Number of states	Total population	Urban population (% of total)
North	450	7	18 906 962	13 970 531 (74%)
North-East	1 794	9	57 667 842	42 450 593 (74%)
South-East	1 668	4	89 632 912	83 473 545 (93%)
South	1 191	3	30 402 587	26 041 942 (86%)
Central-West	467	4	16 707 336	14 887 828 (89%)

Note: More recent population estimates are available (e.g., www.ibge.gov.br 2023 census data), however, this data is presented for consistency with SNIS metrics and calculations cited throughout.

Source: (SNIS, 2021[2]). Data extracted April 2023.

Table 2.2. Benchmarking water withdrawal

Country	Total water withdrawal (all purposes) (Gm3 per year)	Water withdrawal per capita (l/inhab./day)	Municipal water withdrawals per capita (l/inhab//day)
Brazil	67.2	865.6	207.7
Argentina	37.8	2288.7	354.3
Colombia	29.1	1566.7	200.4
France	26.3	1102.0	222.7
United States	444.3	3675.0	482.9

Note: All data for 2020. The indicator used to calculate comparative per capita consumption per day for municipal/domestic uses is based on the measure of municipal withdrawal as a percentage of total water withdrawal per country. The total withdrawal per country does not discount losses due to evaporation in storage tanks or informal connections. Municipal withdrawal, on the other hand, includes drinking water, municipal use or supply, and use for public services, commercial establishments, and homes (World Bank – DataBank).

Source: AQUASTAT, Food and Agriculture Organization of the United Nations. Data extracted in May 2023.

The level of demand for water in Brazil, for all uses, including drinking water supply and sanitation services, varies by region and state, and depends on the distribution of the population between urban and rural locations. Daily water consumption in Brazil is estimated at 150.7 litres per inhabitant per day (4.5 m³ per month), but ranges from 117.2 litres in the North-East, to 171 litres in the South-East – the region with the largest population and greatest degree of urbanisation (Table 2.1). On balance, consumption, and therefore overall water withdrawal, is driven by agricultural needs for irrigation and livestock (77.9%), followed by urban and rural population needs (10.9%) (Table 2.3).

Water withdrawal and consumption are not always equal, and the discrepancies between the two can vary within country and between countries, due to their economic characteristics, the efficiency of the network, and other factors. In the case of water supply for human consumption, an example is water losses in transportation, which can result in the volume reaching consumers differing from the volume withdrawn at source. In Brazil, typically, the greatest differences between withdrawal and consumption, due to the impact of losses or flows, are found in human-use and power generation.7

Table 2.3. Water consumption in Brazil by region

Region of Brazil	Average per capita consumption (l/hab./day)	Share of consumption (%)
		Human use (of which urban)	Power generation	Industrial uses	Agriculture (Irrigation & livestock)	Mining
North	142.5	21.1 (14.6)	0.6	2.5	69.9	5.8
North-East	117.2	10.4 (6.8)	0.4	9.0	80.1	0.1
South-East	171.0	15.6 (14.1)	0.2	15.4	67.1	1.6
South	147.0	5.8 (4.5)	0.4	4.7	88.7	0.4
Central-West	147.8	6.0 (5.2)	0.05	11.0	82.5	0.3
Brazil	150.7	10.9 (8.7)	0.3	9.8	77.9	1.0

Source: (SNIS, 2021[2]); ANA - Base Nacional de Referência de Usos Consuntivos da Água no Brasil, 2021. Data extracted May 2023.

Regarding the quality of available water resources in Brazil, approximately 71% of monitored bodies of water had good ambient water quality in 2020 according to UNEP data gathered to evaluate progress on SDG 6. This level is similar to Paraguay (72%) and Uruguay (76%), above Argentina (18%) and Peru (25%), but below Chile (84%) (UN-WATER, 2020[23]).

Water supply and sanitation services

Brazil’s water supply and sanitation service sector is characterised by its scale and variety of actors and operation, with federal, state, and municipal level authorities and providers interacting to produce a wide range of outcomes across geographies. Brazil withdraws a huge volume of water to supply urban and rural communities and meet consumption needs, including for sanitation service provision, but due to low purchasing power and water losses, consumption per capita remains comparatively low. The sector is dominated by state-owned companies and contractual and tariff structures vary widely across state boundaries, as do the levels of service provision, service quality and costs. At the time of writing, the sector shows significant gaps to legislated targets for universalisation, as well as international targets (e.g., the United Nations SDG 6).

Sector size and scale

Brazil’s 213 million inhabitants, nearly half of the total population of South America, make Brazil’s water supply and sanitation market the largest in South America and the fifth largest in the world.8 More than 7 300 service providers were estimated to be operating in the sector in 2021 across all service areas (IBGE, 2018[24]) (SNIS, 2021[2]). Summary data on the size, coverage and value of water supply and sanitation services for Brazil’s population is provided in Table 2.4, by service area.

Table 2.4. Summary of water supply and sanitation services in Brazil

	Serviced population (millions)	Coverage of potential serviced population1	Serviced urban population (millions)	Coverage of urban population	Estimated number of service providers	Of which private providers	Annual reported system investment, BRL bn
Drinking water supply	177.0	84.2%	167.5	93.5%	1 342	9.02%	7.76
Sewage collection and treatment	117.3	55.8%	114.8	64.1%	3 347	3.7%	7.35
Solid urban waste	191.3	89.9%	177.8	98.3%	-	-	-
Urban drainage and rainwater treatment	143.02	81.7%2	143.02	-	-	-	6.44

Note: Data is not available for all municipalities and is self-reported. The sample size (as a % of the total population) is as follows for each service area: water supply, 98.6%; basic sanitation, 95.1%; solid urban waste, 95.5%; and urban drainage, 93.2%.

1. Percentages calculated based on the total urban or urban and rural populations in Brazil (2021 figures), for the relevant service area (e.g., urban drainage only applies to the potential urban population).

2. Aggregated figures for urban drainage are constructed based on SNIS data relating to separate urban drainage management or treatment systems.

Source: (SNIS, 2021[2]). Data extracted April 2023.

Considering demand for water supply, despite a relatively high proportion of demand coming from urban and rural population centres (Table 2.2), municipal water withdrawal per capita, a proxy for household and human consumption, in Brazil is relatively low (207 litres per inhabitant per day), versus neighbouring Argentina (354 litres /inhab./day) or the United States (483 litres/inhab./day). Municipal water withdrawal in Brazil is much closer to that of Colombia (200 litres/inhab./day), but also France (223 litres/inhab./day), which is considered a more efficient manager of demand and resource within the sector (OECD, 2017[21]). In Brazil, low purchasing power results in a lower overall municipal or household demand relative to countries where purchasing power is higher.9

In sanitation services, there are significant differences between regions in Brazil, in terms of the existing coverage of services and the level of un-met demand.

The demand for sewage collection and treatment will naturally increase as the water network is extended and as water supply coverage reaches universality. However, the situation is unequal across regions with the proportion of the population lacking sewage services (Table 2.5) ranging from 18.3% in Brazil’s South-East region, to 86% in the North.

This is the case in other sanitation services too (Table 2.5). For solid waste collection, the estimated10 unserved demand in terms of both waste not collected or population unserved also varies significantly by region. On average, around 10% of Brazil’s population, or 12.3 million people, are not covered by a regular solid waste collection service. There are meaningful differences between regions in the average amount of urban solid waste collected per inhabitant, which ranges from 0.67 Kg per day in the South, to 0.86 Kg per day in the North-East. When considering these differences alongside regional populations, estimates can be extrapolated which also show difference across regions in the level of unmet demand. The total mass of solid waste in Brazil remaining uncollected is estimated at 17 kilotons per day summing all regions, or an additional 0.09 Kg per day per urban inhabitant (SNIS, 2021[2]).

For urban rainwater drainage and treatment, demand and investment need is assessed from a risk perspective, i.e., exposure to flood risk, since demand for this service ultimately depends on the volume and severity of rainfall received by each urban area, as well as the area’s topography and physical characteristics (e.g., urban density and the existence and capacity of natural reservoirs) (SNIS, 2021[2]). Differences between regions in this service area are somewhat justified, since not all regions receive the same amount of rainfall and so do not face the same levels of risk, nor require the same level of investment in infrastructure for rainwater capture and storage. Though minimising risks for the worst affected regions remains important (5.3% of the population in the North regions are considered at risk of flooding).

Table 2.5. Demand-side indicators for sanitation, by service and region

Region of Brazil	Sewage collection and treatment	Urban rainwater	Solid waste collection (urban only)
	Proportion of population remaining unserved1	Share of households at risk of flooding	Proportion of population served	Total collected mass (per inhabitant served, per day)2	Estimated total mass remaining uncollected daily3 (millions)
North	86%	5.3%	79.02%	0.68 Kg	2.7 Kt
North-East	69.8%	2.9%	82.30%	0.85 Kg	8.7 Kt
South-East	18.3%	4.6%	95.77%	0.76 Kg	2.9 Kt
South	51.6%	3.8%	91.57%	0.67 Kg	1.7 Kt
Central-West	28.1%	3.5%	90.87%	0.75 Kg	1.1 Kt
Brazil	44.2%	4%	89.93%	0.76 Kg	17 Kt

1Calculated based on SNIS Basic Sanitation Panel available at: Sanitary Sewage — Ministry of Integration and Regional Development (www.gov.br).

2Based on the RDO mass indicator, rather than total collected mass.

3Calculated based on SNIS Solid Waste Indicators Map available at: Collection indicators (mdr.gov.br) and the regional/total urban population figures (1 Kiloton = 1 million Kg).

Source: (SNIS, 2021[2]). Data extracted May 2023.

Sector structure

As in other countries of South America, the structure of the water supply and sanitation services sector in Brazil is dominated by state-owned companies11 (or SOEs), especially in urban areas, even though municipalities are legally responsible for the delivery of services to consumers. Of Brazil’s 27 states (including the federal district), 25 have state water and sanitation companies (i.e., companies where the state owns a majority share), most of which have benefitted from long-term, automatically renewing contracts with individual or “blocks” of municipalities. However, this situation is changing following the 2020 Sanitation Law reform. Where service delivery contracts for water supply and sanitation have not been delegated to state companies, a mix of private companies, public-private partnerships, or other municipal public bodies may hold contracts and be active in provision at the municipal, or inter-municipal level (Smiderle et al., 2020[25]).

However, private sector provision is increasing. Recent reporting on municipal auction data shows the number of municipalities served by the private sector increased by a third from 2020 to 2021, with private concessionaires holding 199 signed contracts, ranging from full and partial concessions (88%) to PPPs (10%) and sub-delegations (ABCON SINDCON, 2022[26]). The level of private sector provision varies from service to service, from 4% in wastewater collection and treatment to 9% in water supply services (SNIS, 2021[2]).

Despite a changing mix of operators in the sector, the new legal framework remains focused on promoting regionalisation, that is, the procurement and provision of services at the inter-municipal level to “blocks” of municipalities, in the interest of capturing economies of scale. Once states have initiated regionalisation, they will be able to move on with competitions and concessions, following the models available under the new legal framework (see Box 2.1).

Box 2.1. Concessions, sub-concessions, and Public-Private Partnerships (PPPs)

Full or partial concessions

Concession contracts allow the operation and maintenance of the water supply and basic sanitation systems to be transferred from the legally responsible entity (in Brazil normally the municipality) to a new provider. The contracted provider, which may be a public or private entity, typically takes on responsibility for both service provision and any necessary investments for the period, whilst collecting revenue by charging regulated tariffs to customers. Regulatory agencies may be involved in monitoring the fulfilment of the terms of contracts at the municipal or state level. Full concessions typically describe contracts for both water and basic sanitation. Partial concessions describe contracts for one of these services (water or basic sanitation). Full or partial concessions may be municipal or regional (more than one municipality). Concessions are awarded following a competitive bidding or auctioning process.

Sub-delegations or sub-concessions

Sub-concessions describe a transfer of responsibility for the delivery of part of an existing concession contract to a third-party provider (subdelegated company). This contractual model is allowed under Law No. 8.987/85 (Concessions Law). The third-party provider takes on all the rights and obligations of the primary concession holder, within the limits of the sub-concession. Sanitation services are currently provided in the Brazilian States of Goiás and Piauí by third-party companies under sub-concessions.

Public-Private Partnership (PPP) and sub-concessions

Private provision of water supply and basic sanitation services is enabled through different contractual models. Public-private partnership, based on an administrative contract between a private provider and public entity (usually municipality) is a popular option. The term of this contract can be as long as 35 years, in accordance with Law No. 11.079/2004 (the PPP Law), which imposes certain limitations on the total value of the contract. Sanitation PPPs are in operation in the Brazilian states of Pernambuco, Alagoas, Amapá, São Paulo, Rio de Janeiro, Minas Gerais, and Bahia, with other states studying their potential application under future auctions. As with concessions, PPP contracts are awarded following a competitive public bidding process.

Source: OECD analysis of noted legislation; ABCON SINDCON (2022).

Tariff structure and affordability

Tariffs for water supply and sanitation services12 are generally set by state regulatory agencies and consortia via four-year or extraordinary revisions, which focus on cost recovery and investment allowances, with annual tariff adjustments made to ensure tariff levels remain in line with variable inflation and performance.13

Tariff structures depend on category of use (i.e., residential, commercial, industrial, or public), and within these categories there are special tariffs for users with lower purchasing power, or for social assistance and public administration entities that may sign special contracts.14 Typically, tariffs are structured with both a fixed and variable element to the fee. The fixed fee, or basic rate, covers the cost of water supply infrastructure maintenance, and is often based on the connection (i.e., the size of the water meter installed), whereas the variable fee covers variable consumption, and is charged per cubic meter of water used. Data for seven of the nine largest Brazilian cities suggests contracts typically price variable consumption according to an increasing block tariff structure (GWI, 2021[27]), which can be socially regressive (Leflaive and Hjort, 2020[28]).

In addition to the fixed and variable fees that make up the consumer tariff, there is a connection fee charged for any new connections to access the serviced water network. Where these connection fees are high, they can act as deterrents to connect and subsidising these fees can be as effective as subsidising consumption via social tariffs (described below).

Some water utilities in Brazil may also charge consumers a sanitation fee, which covers the cost of treating and disposing of wastewater and is calculated as a percentage of the total water bill. However, more often, the cost of sanitation is structured as an “availability tariff” and is charged by the sanitation service provider to the local government or municipal authority, which recuperates costs via local taxation. For combined water-sanitation bills, the variable costs can account for anywhere between 36% and 88% of the total bill (GWI, 2021[27]).

In addition to consumption levels and the quality of infrastructure, tariff levels are driven by factors such as population density, water availability and the management practices of utilities. Basin-level water charges relating to withdrawal for water supply and sanitation may be another component when these costs are passed on to end-consumers. However, recent assessment suggests they are a minor contributing factor (OECD, 2017[21]).15

Since tariffs, both fixed and variable components, are regulated at the state level, prices for the same level of consumption can vary (Table 2.6 and Table 2.7).16 For water-only and combined water-sewage tariffs, average prices are much higher in the South region than in the North, the most costly and cheapest regions respectively. For separate sewage services, tariffs are highest in the Central-West region, and again lowest in the North.

Analysing selected examples of the water bill structure in Brazil, we find differences between providers in terms of the level of fixed charges and the use of a fee allowance. Taking the GWI benchmark17 consumption level to assess the available Brazilian cities, the cheapest monthly bill is in São Paulo ($52 BRL) and is characterised by a medium-level fixed charge, a relatively generous free allowance for the first 10m³ consumption, and a medium-level rate for the second block of consumption, which covers up to 20m³ consumption. In contrast, the highest monthly bill ($87 BRL) is in Curitiba, characterised by a high standing charge and a less generous free allowance. In this case, a low second block rate is applied but only up to 10m³ consumption, which the benchmark household exceeds exposing it to a more costly third block rate.

Table 2.6. Average tariff levels, by region

Location	Average Water/Sanitation tariff (BRL/m³)	Average Water Tariff (BRL/m³)	Average Sanitation tariff (BRL/m³)
North	3.84	3.88	3.66
North-East	4.49	4.70	4.16
South-East	4.11	4.29	3.98
South	6.10	6.83	4.77
Central-West	5.28	5.48	5.14
Brazil	4.51	4.81	4.17

Source: (SNIS, 2021[2]).

Table 2.7. Indicative costs of the water bill, and fixed and variable components

City	Provider	Total monthly household bill (BRL)1	Change in household cost of water /m32	Fixed charge (BRL)	No. variable blocks	Block 1 tariff rate (BRL/m3)	Monthly allowance at block 1 rate (m3)	Block 2 tariff rate (BRL/m3)	Final block rate (BRL/m3)
Belo Horizonte	COPASA	76.26	0.49%	17.61	6	1.82	5.0	3.89	12.76
Brasilia	CAESB	64.47	(0.31%)	8.05	6	2.98	7.0	3.57	19.99
Curitiba	SANEPAR	86.91	11.18%	43.11	6	0.00	5.0	1.33	12.74
Recife	COMPESA	70.98	2.38%	45.13	6	0.00	10.0	5.17	19.28
Rio de Janeiro	CEDAE	68.33	-	0.00	5	4.56	15.0	10.02	12.76
Salvador	EMBASA	76.47	-	29.90	8	0.00	6.0	1.18	13.55
São Paulo	SABESP	51.70	10.75%	29.00	4	0.00	10.0	4.54	12.48

Note: Survey conducted at the city level, only these Brazilian cities available (7 of the nine largest by population).

1Based on GWI calculation for a benchmark household consumption level of 15 m³/month (per capita consumption in Brazil for 2021 as measured by SNIS is 150.7 l/inhabitant/day, or 4.521 m³/month).

2Comparing 2021 versus 2020 for the same GWI benchmark household.

Source: GWI Global Tariff Survey (GWI, 2021).

Subsidies and social tariffs

The consumers who benefit from tariff subsidies may be individuals or businesses, since policies often aim to address multiple challenges: ensuring affordability and the universalisation of service access, reducing informal (“clandestine”) access, boosting economic growth by supporting small businesses, and reducing risks relating to water-based emergencies and critical events.

Social tariffs describe a sub-instrument focused on redistribution, which targets the issues of affordability and access among more vulnerable residential consumers. However, social tariffs are financially enabled and managed by the service providers themselves, therefore, they represent a form of cross-subsidisation between consumers. State governments and regulators set expectations and have traditionally stepped in to support SOEs when issues of sufficiency arise.

How social tariffs and subsidies are applied varies significantly across Brazil. Although the law18 provides a framework for the tariff subsidisation, the determination of the criteria for granting subsidies, as well as verification methods and implementation, varies significantly by region, state, and by service provider (Box 1.2.). Despite inconsistencies across states, most providers do have mechanisms for granting social tariffs based on different consumer categories, but since the definition and measurement of consumer categories also differs by region, outcomes are varied across Brazil. It is also important to note that any subsidies that do apply, may apply to tariffs for water only, water and sanitation combined, or sanitation services only, though the latter case is rare for residential customers (Law No. 14.026, 2020[15]).

In general, social tariffs are granted to the lowest-income segment also falling within the lowest consumption range, or with some consideration for consumption rate and suitability. Sometimes other socio-economic variables, geographical location or eligibility for other state social programmes are considered. Meanwhile, the benefits range from a full exemption (free service provision), to a reduction in the fixed fee component, variable component, or both. It remains up to the provider (which may be a public or private entity covering the local, municipal, or regional level) to establish and implement its own criteria.

Box 2.2. Examples of social tariffs and consumer subsidies in Brazil’s WSS sector

Sao Paulo (Sabesp)

In the case of the State of São Paulo, Companhia de Saneamento Básico do Estado de São Paulo SA (Sabesp) targets single-family homes, unemployed people, and residential users in collective housing or at risk of removal. The specific criteria used to categorise users are financial, spatial, or consumption-based: a family income of up to 3 times the minimum wage; a living space of up to 60 square meters; electricity consumption of up to 170kWh/month; with no debts for the property. Users meeting all the target criteria receive a full exemption for 24 months. Unemployed users receive a 12-month exemption.

Pernambuco (Compesa)

In the State of Pernambuco, in north-eastern Brazil, Companhia Pernambucana de Saneamento (Compesa) has a social tariff program offered to low-income customers who meet specific criteria. In order to qualify for the discount, customers must prove their average consumption of water and electrcitiy, have a paycheck, social benefit or social security benefit up to the amount of one minimum wage, be the owner of a single property, and live in a property with a standard compatible with the family income. If these criteria are met, the user receives a proportional discount of around 80% of the water tariff and a full exemption from sanitation costs.

Minas Gerais (Copasa)

In the state of Minas Gerais, provider Companhia de Saneamento de Minas Gerais (COPASA MG), intervenes to limit the tariff applied to low-income residential users. Users have to prove their status as a residential user, enrolment in the Cadastro Único para Programas Sociais, and provide income statements that prove one household member earns an amount less than or equal to half the minimum wage. Once the criteria have been met, users access a residential social tariff which reduces both the fixed rate and the tiered consumption charges by approximately 50%, up to 20m³ of consumption.

Note: This list of examples is not comprehensive, the selection is based on the size of the customer base to provide an indication of the consumer experience and availability of social tariffs for the population.

Source: Provider websites (Sabesp, Compesa, Copasa) and state-level regulatory agency websites (ARSAE-MG). Accessed May 2023: https://www.sabesp.com.br/site/interna/Default.aspx?secaoId=772; https://servicos.compesa.com.br/perguntas-frequentes/; http://www.arsae.mg.gov.br/wp-content/uploads/2022/10/Tabela_Tarifaria_Copasa_2023_Publicacao.png.

Overall sector performance

Access and coverage

Data indicates that the market is far from delivering on the ambition of universal access as defined most recently in the 2020 Sanitation Law (see Water supply and sanitation reform) and the ambitions of agreed international goals.19 Operational data show a gap of 17 and 30 percentage points respectively in water supply and basic sanitation coverage to legislated universalisation targets (Table 2.8).

The analysis of tariff structures and levels above also indicates the widespread use of social tariffs, suggesting that even if universal access is technically achieved, affordability may still present barriers to some households. Therefore, continued encouragement of the provision of social assistance, or extending this action to direct social policy intervention, may be required to ensure basic needs are met.

Table 2.8. Service provision and associated costs in Brazil, by service area

Water supply		Sewage collection and treatment		Urban rainwater			Solid waste collection
Provision (% of population)	Expenditure per capita (annual)	Provision (% of population)	Proportion of collected sewage treated	Proportion of urban areas with minimum drainage system1	Proportion of municipalities with pavement or underground drainage	Expenditure per capita (annual)	Provision (% of population)	Expenditure per capita (annual)
84.2%	BRL 233.16	55.8%	80.8%	81.7%	83.3%	BRL 26.13	89.9%	BRL 147.44

1Aggregated figures for urban drainage are constructed based on SNIS data relating to separate urban drainage management or treatment systems.

Source: (SNIS, 2021[2]). Data extracted May 2023.

Quality, efficiency and sustainability

Levels of expenditure vary across services areas, with the highest expenditure associated with water supply, based on the total costs of provision for the year to consumers. The estimated value of distribution losses (non-revenue water) relative to expenditure is high at $40.25 BRL ($8.30 USD), though overall cash sufficiency is maintained (Table 2.9). As in many other countries, the financial viability of water utilities in Brazil is seriously impacted by lost revenue20 and increased operational costs, with tariffs rising as a result (World Bank, 2022[29]). Recent research focusing on the sustainability of state-owned water and sanitation companies (SOEs) concluded that nine of the twenty-five assessed SOEs were sustainable on purely economic grounds, but after introducing social and environmental considerations, only two companies – Sanepar and Sabesp – were considered sustainable across all dimensions21 (Gonçalves et al., 2022[30]).

For water and sanitation services, Brazil’s economic recovery is a key factor in maintaining quality, affordability and access, due to its potential impacts on credit and redistribution. Furthermore, willingness to pay for water, and the social acceptance of charging for water, was already limited in Brazil (OECD, 2022), and the economic crisis experienced from 2015 onwards has undermined acceptance amongst consumers to pay rising bills. As a result, public and private actors need to balance several potentially conflicting objectives:22 ensuring affordability for vulnerable consumers and mitigating informal connections; investing to deliver universal access and maintain quality standards; increasing access to sanitation services; and, generally, operating efficiently to reduce the burden on municipal, state, and federal budgets and cost to consumers.

Table 2.9. Service quality and sustainability in Brazil, by service area

Water supply			Basic sanitation1	Urban rainwater		Solid waste collection
Value of distribution losses (per inhabitant per year)	Cash sufficiency2	Proportion of bodies of water with good ambient water quality	Registered leakages/ Km network	Population impacted by hydrological events3	Relocated population (per 100 000)	Recovery rate of collected recyclable mass
40.25 BRL	115.3%	71%	2.5	0.2%	302	2.35%

1. For basic sanitation services, cash sufficiency matches the figures shown for water supply.

2. Cash sufficiency illustrates the ratio, expressed as a percentage, of collected revenues to expenditure (sum of operating expenditure, taxes, debt servicing costs, and debt repayments).

3. Proportion of urban populations displaced or made homeless by hydrological events (flooding).

Source: (SNIS, 2021[2]); (UN-WATER, 2020[23]). Data extracted June 2023.

References

[26] ABCON SINDCON (2022), Panorama of private participation in sanitation - 2022, https://abconsindcon.com.br/wp-content/uploads/2022/10/Panorama2022-english-final.pdf (accessed on  June 2023).

[13] ANA (2022), 3º Boletim de Monitoramento, https://www.gov.br/ana/pt-br/assuntos/seguranca-hidrica/plano-nacional-de-seguranca-hidrica/boletins-de-monitoramento-do-pnsh-1 (accessed on  June 2023).

[12] ANA (2019), Plano Nacional de Segurança Hídrica, https://pnsh.ana.gov.br/home (accessed on  June 2023).

[10] ANA (2011), Pacto Nacional pela Gestão das Águas, https://www.gov.br/ana/pt-br/acesso-a-informacao/governanca%20e%20gestao%20estrategica/pacto-pela-agua (accessed on  June 2023).

[11] ANA (2011), Programa de Consolidação do Pacto Nacional pela Gestão das Águas, https://progestao.ana.gov.br/progestao (accessed on  June 2023).

[16] Decree No. 10.430 (2020), “DECRETO Nº 10.430, DE 20 DE JULHO DE 2020”, Dispõe sobre o Comitê Interministerial de Saneamento Básico, https://www.planalto.gov.br/ccivil_03/_ato2019-2022/2020/decreto/D10430.htm (accessed on  June 2023).

[17] Decree No. 10.588 (2020), DECRETO Nº 10.588, DE 24 DE DEZEMBRO DE 2020, https://www.planalto.gov.br/ccivil_03/_ato2019-2022/2020/decreto/D10588.htm (accessed on  June 2023).

[18] Decree No. 10.710 (2021), DECRETO Nº 10.710, DE 31 DE MAIO DE 2021, https://www.planalto.gov.br/ccivil_03/_ato2019-2022/2021/decreto/d10710.htm (accessed on  June 2023).

[19] Decree No. 11.598 (2023), DECRETO Nº 11.598, DE 12 DE JULHO DE 2023, http://www.planalto.gov.br/ccivil_03/_ato2023-2026/2023/decreto/D11598.htm (accessed on  August 2023).

[20] Decree No. 11.599 (2023), DECRETO Nº 11.599, DE 12 DE JULHO DE 2023, http://www.planalto.gov.br/ccivil_03/_ato2023-2026/2023/decreto/D11599.htm (accessed on  August 2023).

[5] European Parliamentary Research Service (2021), Brazil’s Parliament and other Political Institutions, https://www.europarl.europa.eu/RegData/etudes/BRIE/2021/659447/EPRS_BRI(2021)659447_EN.pdf (accessed on  June 2023).

[22] FAO (2020), AQUASTAT - Global Information System on Water and Agriculture, https://www.fao.org/aquastat/en/ (accessed on  June 2023).

[30] Gonçalves, E. et al. (2022), “Sustainability of water and sanitation state-owned companies in Brazil”, Competition and Regulation in Network Industries, Vol. 23/2, pp. 101-118, https://journals.sagepub.com/doi/epub/10.1177/17835917221077915.

[27] GWI (2021), The Global Water Tariff Survey - 2021, https://www.globalwaterintel.com/products-and-services/market-research-reports/tariff-survey (accessed on  June 2023).

[24] IBGE (2018), Cidades Online Portal, https://cidades.ibge.gov.br/brasil/pesquisa/30/84366?ano=2017 (accessed on  2023).

[14] Law No. 11.445 (2007), “LEI Nº 11.445, DE 5 DE JANEIRO DE 2007”, Estabelece as diretrizes nacionais para o saneamento básico; cria o Comitê Interministerial de Saneamento Básico, http://www.planalto.gov.br/ccivil_03/_ato2007-2010/2007/lei/l11445.htm#:~:text=LEI%20N%C2%BA%2011.445%2C%20DE%205%20DE%20JANEIRO%20DE%202007.&text=)%20(Vig%C3%AAncia%20encerrada)-,Estabelece%20diretrizes%20nacionais%20para%20o%20saneamento%20b%C3%A1sico%3 (accessed on  June 2023).

[9] Law No. 12.334 (2010), “LEI Nº 12.334, DE 20 DE SETEMBRO DE 2010”, Estabelece a Política Nacional de Segurança de Barragens destinadas à acumulação de água para quaisquer usos, https://www.planalto.gov.br/ccivil_03/_ato2007-2010/2010/lei/l12334.htm (accessed on  June 2023).

[15] Law No. 14.026 (2020), “LEI Nº 14.026, DE 15 DE JULHO DE 2020”, Atualiza o marco legal do saneamento básico para atribuir à Agência Nacional de Águas e Saneamento Básico (ANA) competência para editar normas de referência sobre o serviço de saneamento..., https://www.planalto.gov.br/ccivil_03/_ato2019-2022/2020/lei/l14026.htm (accessed on  June 2023).

[7] Law No. 9.433 (1997), “LEI Nº 9.433, DE 8 DE JANEIRO DE 1997”, Institui a Política Nacional de Recursos Hídricos, cria o Sistema Nacional de Gerenciamento de Recursos Hídricos, https://www.planalto.gov.br/ccivil_03/leis/l9433.htm (accessed on  June 2023).

[6] Law No. 9.784 (1999), “LEI Nº 9.784 , DE 29 DE JANEIRO DE 1999”, Regula o processo administrativo no âmbito da Administração Pública Federal, https://www.planalto.gov.br/ccivil_03/leis/l9784.htm (accessed on  June 2023).

[8] Law No. 9.984 (2000), “LEI No 9.984, DE 17 DE JULHO DE 2000”, Dispõe sobre a criação da Agência Nacional de Águas e Saneamento Básico (ANA), entidade federal de implementação da Política Nacional de Recursos Hídricos, integrante do Sistema Nacional de Gerenciamento de Recursos Hídricos (Singreh), https://www.planalto.gov.br/ccivil_03/Leis/L9984.htm (accessed on  June 2023).

[28] Leflaive, X. and M. Hjort (2020), Addressing the social consequences of tariffs for water supply and sanitation, https://doi.org/10.1787/afede7d6-en.

[1] OECD (2022), “Fostering Water Resilience in Brazil”, in Fostering Water Resilience in Brazil: Turning Strategy into Action, OECD Publishing, https://doi.org/10.1787/85a99a7c-en.

[21] OECD (2017), Water Charges in Brazil: The Ways Forward, OECD Publishing, https://www.oecd-ilibrary.org/environment/water-charges-in-brazil_9789264285712-en (accessed on  June 2023).

[3] SIWI/UNICEF/World Bank (2020), “The fundamental role of sanitation and hygiene promotion in the response to Covid-19 in Brazil“, https://documents1.worldbank.org/curated/en/998851596650728051/pdf/O-Papel-Fundamental-do-Saneamento-e-da-Promocao-da-Higiene-na-Resposta-a-Covid-19-no-Brasil.pdf (accessed on  June 2023).

[25] Smiderle, J. et al. (2020), “The Governance of Water and Wastewater Provision in Brazil: Are there clear goals?”, Network Industries Quarterly, Vol. 22/1, https://www.network-industries.org/wp-content/uploads/2020/03/The-Governance-of-Water-and-Wastewater-Provision-in-Brazil.pdf.

[2] SNIS (2021), Sistem Nacional de Informacao sobre Saneamento - 2021, https://www.gov.br/mdr/pt-br/assuntos/saneamento/snis/painel/ab (accessed on  June 2023).

[4] Supremo Tribunal Federal (2022), “Constituição (1988)”, Constitution of the Federative Republic of Brazil., https://www.stf.jus.br/arquivo/cms/legislacaoConstituicao/anexo/brazil_federal_constitution.pdf (accessed on  June 2023).

[23] UN-WATER (2020), SDG 6 Date Portal, http://www.sdg6data.org/en/country-or-area/Brazil#anchor_6.1.1 (accessed on  June 2023).

[31] WHO/UNICEF (2021), Joint Monitoring Programme for Water Supply, Sanitation and Hygiene, https://washdata.org/ (accessed on  June 2023).

[29] World Bank (2022), The Challenge of Reducing Non-Revenue Water in Developing Countries, https://ppp.worldbank.org/public-private-partnership/library/challenge-reducing-non-revenue-water-nrw-developing-countries-how-private-sector-can-help-look-performance-based-service-contracting (accessed on  June 2023).

Notes

← 1.  Following the 2022 elections, the former duties of the Ministry of Economy have been split between Ministries of Finance (MR), of Planning and Budget (MPO), of Management and Innovation in Public Services (MGISP), and of Development, Industry, Trade and Services (MDICS).

← 2.  The revenues from which should be redirected to the basin to fund initiatives which improve basin management or ensure sustainability and conservation.

← 3.  For example, Law 12.058/2009 provides for ANA’s duties to regulate and supervise the provision of public irrigation services, when under concession, and bulk water adduction, which is not listed as a major item of sector reform in this Chapter but is covered by ANA’s mandate (see Chapter 3).

← 4.  For more information on the Pact and the detailed objectives applying to each sector, please refer to the following web page and ANA’s primer: Pact for Water — National Agency for Water and Basic Sanitation (ANA) (www.gov.br).

← 5.  Under the “Union’s domain” is commonly cited legal terminology for rivers crossing state boundaries within Brazil or international boundaries between Brazil and neighbouring countries, which are then managed by federal rather than individual state-level institutions.

← 6.  It is important to note that the charges are calculated considering each type of use: abstraction, consumption, and discharge. Pollution charges apply generally to the discharged volume and so there may be some differences between users in the composition of the charges received. See Water Charges in Brazil: The Way Forward for a fuller discussion (OECD, 2017[21]).

← 7.  In power generation, due to the discharge of the bulk of water withdrawn, water consumption levels appear low, this differs from the transportation or leakage losses witnessed in water supply.

← 8.  Derived using data from the Joint Monitoring Programme for Water Supply, Sanitation and Hygiene available at: www.washdata.org (WHO/UNICEF, 2021[31]).

← 9.  Lower demand may also be a result, in addition to the low purchasing power of households, of clandestine, non-metered water use and the recourse to alternative water sources

← 10.  Using SNIS data on service coverage, and figures for the average amount of waste collected per inhabitant.

← 11.  State-owned here refers to ownership by one of the 26 Brazilian states, or the federal district, not the Union.

← 12.  The focus of this section is on the tariffs charged to end-consumers by service operators for water and sanitation services, rather than water charges levied on water rights holders for pollution or abstraction, for example for power generation.

← 13.  Following a sliding-scale, or “earnings sharing” price control approach.

← 14.  These special contracts may stipulate conditions on the rational use of water (i.e., required efficiency measures).

← 15.  Water supply and sanitation is just one sector requiring water abstraction, which may be liable to water charges at the basin level within each state, or at the federal level, depending on the location of the basin in question. Other sectors driving water abstraction in Brazil include power generation, industry, and agriculture. Importantly, water charging at the basin level for water supply and sanitation, to the extent that charges are passed-on to end-consumers, can contribute to tariff levels, though in most cases water charges are a very small component of the final bill (OECD, 2017[21]).

← 16.  The GWI (Global Water Intelligence) Global Tariff Survey data covers tariffs wastewater and stormwater besides the water tariff data presented here (GWI, 2021[27]).

← 17.  The GWI benchmark dataset assumes behind-the-meter (residential) consumption of 15m³/month, which is slightly above the SNIS estimate of 4.52m³/month/per capita, given an average household size in Brazil of 2.77 persons.

← 18.  Article 31 of Law 11.455/2007 (modified by Law 14.026/2020).

← 19.  Brazil’s national objectives are reinforced in the UN 2030 Agenda for Sustainable Development, of which Brazil is a signatory, in the international goal (SDG) to establish the availability and sustainable management of water and sanitation for all.

← 20.  Due to a combination of non-revenue water (distribution losses and clandestine, non-metered use) and low purchasing power (which leads both to unpaid bills and the necessity to provide social assistance via social tariffs).

← 21.  Researchers at FGV CERI assessed SOEs on economic, social, and environmental components. They utilised SNIS operational data, but with a focus on urban populations, and incorporated return on equity (ROE) as an economic indicator. Access to continuous water supply and sanitation services and drinking water safety were the key variables for the social dimension. Indicators on water distribution losses and wastewater treatment were the key variables for the environmental dimension.

← 22.  Ensuring affordability for vulnerable consumers and mitigating informal connections involves offering subsidised tariffs. Investing to deliver universal access and maintain quality standards involves significant capital costs and operating expense. Increasing access to sanitation services increases costs for municipalities and regions. Generally, operating efficiently to reduce the burden on municipal, state and federal budgets and cost to consumers, which can be unsustainable or unachievable within short time periods, particularly when economic growth is stagnant. Brazil's economy is projected to grow 1.2% in 2023, and 1.4% in 2024, a deteriorating outlook following growth of 2.8% in 2022 (OECD, 2022[1]).