SABESP UCL III

active

The proposed investment consists of a (i) US$184 million ten-year senior unsecured Sustainability-Linked A Loan (“SLL”) and (ii) up to US$600 million B1 Loan to Companhia de Saneamento Basico do Estado de São Paulo (“SABESP” or the “Company”). SABESP, an existing IFC client since 2022, is the largest water and sanitation service provider in Brazil and among the largest worldwide. The Company was founded in 1973 and provides water and sanitation services to more than 28 million people in 375 municipalities.IFC use of proceeds consist of financing twenty seven subprojects or components that are part of the “Integra Tietê Program”, one of the most relevant sanitation programs in the country, which aims to improve the Tietê River environmental quality by connecting households to the wastewater collection and treatment systems (collectively referred to as the “Project” in this ESRS), therefore avoiding the discharge of untreated sewage into the river. The Integra Tietê Program will be concluded by 2029 and will contribute to SABESP’s goal of universalization of water and sanitation services by 2033. The twenty-seven subprojects   entail five clusters of sanitary sewage systems (“SES” for its Portuguese acronym) located in the municipalities of São Paulo and Guarulhos, designed to collect, transport, and treat wastewater and sewage from residential and commercial sources. The twenty seven systems grouped in five clusters include a network of pipes under public roads and premises, sewage lifting stations, a wastewater treatment plan (WWTP) and mains that convey the sewage to treatment plants, as follows:(i) SES Perus Leste: consisting of 15,460m of sewage pipelines and five lifting stations, connecting 10,709 households. Construction commenced in June 2023 and is expected to be completed by January 2026, with the contract ending in January 2027.(ii) SES Perus Oeste: consisting of 16,381m of sewage pipelines and three lifting stations, connecting 27,483 households. The subproject includes a new conventional activated sludge wastewater treatment plant that will be designed and built to treat the wastewater coming from SES Perus Leste and Oeste. Construction started in February 2024 and expected to be completed and operational by May 2026, with the contract ending in May 2027. Both SES Perus subprojects will contribute to a 7% increase of SABESP’s wastewater treatment index, benefiting 246.000 people.(iii) Vertentes 2&3: expansion of Guarulhos’ sewage collection system through the implementation of 56,707m of sewage pipelines and sixteen lifting stations, connecting 41,970 households. The collected sewage will be conveyed to the São Miguel WWTP, an existing facility with enough capacity to treat Vertente’s sewage. Construction commenced in May 2023 and will be completed by December 2025, with the contract ending in December 2026. It is expected that Vertentes 2&3 will contribute to an 8.5% increase of SABESP’s wastewater treatment index, benefiting 115.000 people. (iv) SES Main Municipality São Paulo: consisting of 12 subprojects, with the execution of 283,697m of sewage pipelines and forty-seven lifting stations, connecting 54,879 households. Construction began in January 2025 and is expected to be completed by December 2026, with the contract ending in December 2027.(v) SES Main Municipality Guarulhos: consisting of 12 subprojects, with the execution of 252,637m of sewage pipelines and seventy lifting stations, connecting 25,543 households. Construction began in December 2024 and is expected to be completed by December 2026, with the contract ending in December 2027.The E&S performance of current investments have been satisfactory based on IFC’s supervision to date.