Brazil: Recovery and Trade-Facilitation Project in Cachoeirinha, Rio Grande do Sul

proposed

In May 2024, the State of Rio Grande do Sul in southern Brazil was hit by devastating floods that severely damaged and destroyed infrastructure throughout the region. The municipality of Cachoeirinha, located in the Porto Alegre metropolitan area, was among the hardest hit. Its economy is heavily dependent on imports and exports, with primary destinations in various Asian countries. The floods displaced over 50,000 inhabitants and caused severe damage to basic infrastructure. The Project aims to build back better the infrastructure damaged in Cachoeirinha, improve resilience to prevent future flooding, and support infrastructure that will enable further trade-linked economic growth. Best practices will be applied in reconstruction, and nature-based solutions will be incorporated wherever possible. The Project components comprise: A. Reconstruction of Flood Protection, Transport, and Urban Infrastructure - Rebuilding failed infrastructure, improving existing flood protection systems (such as dikes, pumps, and drainage), and implementing additional infrastructure to prevent future flood events. B. Construction of an Administrative Center with an Emergency/Disaster Management Center - Establishing a dedicated facility for emergency response and disaster management. C. Innovation and Improvement in Risk Management and Prevention for Flooding and Other Natural Disasters - Implementing a risk-management program and a natural disaster prevention/response program. D. Program and Project Management - Providing management support across all components. Cachoeirinha has a population of about 135,000 inhabitants and is divided into two main zones: a residential area and an industrial area. Nearly half of the municipal economy depends on light manufacturing and warehousing, with significant trade flows to and from Asia. The May 2024 floods caused multiple dike failures and disrupted water and electricity supply, affecting residents and industry. After the floodwaters receded in early June, it became clear that the municipality faced inadequate emergency response capacity, insufficient flood protection and supporting urban infrastructure, and a lack of preparedness measures for future climate events. While the Federal Government of Brazil allocated over USD 17 billion for recovery and reconstruction, significant gaps remain. There is an urgent need to strengthen climate resilience, improve disaster response, and ensure long-term sustainability.