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

proposed

This project is prepared alongside the Post-Flood Reconstruction Project in Cachoeirinha. In May 2024, devastating floods hit the State of Rio Grande do Sul in southern Brazil, causing extensive damage to infrastructure and displacing over 50,000 people. Municipalities of Guaíba and Cachoeirinha, located in the Porto Alegre metropolitan area, were particularly affected. Their economies are heavily dependent on international trade, particularly with Asia. The project aims to build back better damaged infrastructure, enhance flood resilience to prevent future flooding, and support infrastructure that will enable further trade-linked economic growth. Municipality of Guaíba The Resilient Guaíba program includes several components aimed at enhancing flood management and rebuilding critical urban and transport infrastructure. It will apply climate resilience standards and best practices and integrate nature-based solutions where possible. Based on the financing request, the program includes: A. Improving the Efficiency of Urban Drainage and Flood Protection ($17.95 million)- improvement of existing flood protection infrastructure (e.g. dikes, pumps, water drainage system) and implementation of additional infrastructure to reduce flood risks. B. Construction of a Green Logistics and Industrial Area ($13.00 million) - Infrastructure to support cross-border trade with Asia. C. Construction of urban infrastructure and transport access infrastructure ($30.60 million) - rebuilding and expanding resilient transport and urban systems to improve access and connectivity. D. Climate Monitoring, Disaster Risk Management and Sanitation Improvement Program ($4.70 million) - restoring basic infrastructure, implementing a climate monitoring program, and a risk management and emergency notification program. E. Program and Project Management ($3.75 million) - Proportionally supporting all components. Each component will be further defined during the Project's appraisal stage. Guaíba (pop. 93,000 inhabitants) is one of the most industrialized municipalities in the state, with key sectors including cellulose processing (primarily for export to Asia), auto distribution, elevator manufacturing, and other industries. 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.