Brazilian sanitation company Aegea emerged as the top bidder in a major auction of water services concessions in Pará state, winning contracts that will enable a total investment of 15.2 billion reais (US$2.62 billion), reports BNAmericas.
The Pará state government had divided its municipalities into four concession lots, but during Friday’s auction, only three received proposals, all awarded to Aegea. The company will pay a combined fee of 1.4 billion reais (US$245 million) for the trio of contracts.
"It is a pleasure for us to be the winners of these contracts, which will bring social inclusion to all. Aegea already operates in two cities in the state of Pará and will expand to 99 more municipalities," said Renato Médicis Maranhão, regional vice president of Aegea.
The contracts were structured by Brazil’s national development bank, BNDES.
"These three awarded contracts will generate investments of 15.2bn reais and now we will work to make the additional lot, which did not receive any bids, viable to be offered in the future," said Nelson Barbosa, BNDES director of planning and institutional relations.
The lot that received no bids—Lot C—covers 27 municipalities and is expected to require 3.6 billion reais in investment
The lot that received no bids—Lot C—covers 27 municipalities and is expected to require 3.6 billion reais in investment. Each concession agreement runs for 40 years and reflects a broader initiative to improve water and sewage infrastructure in Brazil’s historically underserved northern and northeastern regions.
This expansion comes in the wake of a 2020 sanitation reform law mandating that all Brazilian municipalities must reach full water and sewage service coverage by 2033 to maintain access to federal resources.
While most previous public-private partnership (PPP) contracts have focused on Brazil’s wealthier southern and southeastern regions, authorities are now aiming to shift attention to areas with greater infrastructure gaps.
"Our focus now is to expand into structuring contracts in these regions, showing that the projects are viable," Barbosa added.
The April 11 auction marked a push in that direction. The concessions offered that day, structured by BNDES, spanned four lots and involved 126 of Pará’s 144 municipalities, with expected investments of at least 18.8 billion reais. Municipalities already served by private operators were excluded from the bidding.
"I believe that in the next quarters there will be many sanitation contract auctions in the north and northeast regions of Brazil, which are the regions that will most need to advance in water and sewage coverage," said André Pires de Oliveira Dias, CFO of Aegea Saneamento.
