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

proposed

This project is prepared in parallel to the Post-Flood Reconstruction Project in the Municipality of Guaíba. In May 2024, the State of Rio Grande do Sul, in southern Brazil, was hit with devastating floods, which severely damaged and destroyed infrastructure throughout the region. The municipalities of Guaíba and Cachoeirinha are two municipalities located in the Porto Alegre metropolitan area. Economies of both municipalities are heavily dependent on international trade, with primary destinations being in various Asian countries. The May 2024 floods severely damaged basic infrastructure in both cities and displaced over 50,000 inhabitants. The project aims to build back the infrastructure that was damaged in each municipality, improve infrastructure resilience to prevent future flooding, and support infrastructure that will enable further trade-linked economic growth. Municipality of Cachoeirinha The Program for Urban Resilience and Climate Risk Management for Cachoeirinha includes several components aimed at enhancing flood management and rebuilding critical urban and transport infrastructure, essential for the social and economic recovery of the municipality. As with Guaíba, best practices will be used in project reconstruction, and nature-based solutions will be incorporated wherever possible. Based on the approved request for financing, the program includes the following components: A. Reconstruction of flood protection, transport and urban infrastructure affected by the floods (USD 54.05 million) - rebuilding the failed infrastructure, improvement of existing flood protection infrastructure (e.g. dikes, pumps, water drainage system) and implementation of additional infrastructure to prevent future flood events. B. Construction of an administrative center with an emergency/disaster management center (USD 10.10 million) - the city has no emergency response and disaster management center. C. Innovation and Improvement in Risk Management and Prevention for Flooding and other natural disasters (USD 4.24 million) - implementation of a risk-management program, and a natural disaster prevention/response program. D. Program and Project Management (USD 2.12 million) - to be proportionally divided into each component above. Each component will be further defined during the Project's appraisal stage. in the project description. The Municipality of Cachoeirinha has a population of 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 industry, with significant trade flows to and from Asia. The municipality experienced severe direct impacts during the May 2024 floods, including failures of several dikes, along with indirect impacts on industries, due to disruption in water and electricity supply. After the flood waters receded in early June, it became clear that the municipality suffers from an inadequate emergency response system, insufficient flood protection and supporting urban infrastructure, as well as a lack of emergency preparedness measures to effectively address future climate events. While the Federal Government of Brazil allocated over USD 17 billion for recovery and reconstruction, significant gaps remain in the rehabilitation and reconstruction of damaged infrastructure. There is an urgent need to enhance climate resilience, improve disaster response, and ensure long-term sustainability.