Brazil Water Utility Sabesp Gets $663 Million River Cleanup Loan

Sabesp, Latin America’s largest publicly traded water utility, will be loaned 1.35 billion reais ($663 million) by the national development bank to help clean up the Tiete River that originates in Sao Paulo.

The Tiete, Sao Paulo state’s main river, has become heavily polluted from industry and population growth in South America’s biggest city. It flows inland rather than to the sea, growing larger, and is utilized by Brazilian farmers and agricultural interests.

The loan announcement to Cia. de Saneamento Basico do Estado de Sao Paulo came from BNDES, Brazil’s development bank, which is based in Rio de Janeiro. Brazil is the host of next year’s World Cup and the 2016 Olympic summer games.

The funding includes expanding sewage treatment capacity in more than 20 cities in the Sao Paulo metropolitan area in the third stage of the Tiete cleanup that’s expected to be completed in 2016 as part of a R$2.9 billion project.

According to the statement, the loan will cover Sabesp’s portion of a contract with the Inter-American Development Bank for the third stage. Sabesp had no immediate comment when contacted by Bloomberg.

To contact the reporter on this story: Fabiola Moura in Sao Paulo at fdemoura@bloomberg.net

To contact the editor responsible for this story: Randall Hackley at rhackley@bloomberg.net

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