Sustainability-linked loan to improve water supply efficiency and resilience


Brazil’s “New Sanitation Legal Framework” was established in July 2020, with the objectives that 99% of the population has access to clean water and 90% to sewage collection and treatment by 2033. Despite abundant surface freshwater, only 84% of Brazil’s 215 million people have access to potable water, and only 50% have access to sewerage. Across Brazil, more than 35% of water treated for distribution is lost in leakages, and 43% is lost in distribution in the catchment area of the state utility, Companhia Riograndense de Saneamento (Corsan).

Stakeholders involved

  • State Utility: Companhia Riograndense de Saneamento (Corsan) is the main water and sanitation utility in the State of Rio Grande do Sul.
  • Investor: IFC is a member of the World Bank Group and uses capital and expertise to create markets and opportunities in developing countries.
  • Donor support (advisory): The Government of Japan is a key development partner for IFC, particularly in supporting quality infrastructure investment.


Insufficient public funds and limited use of private capital had resulted in limited progress in improving access to water and sanitation across Brazil. Across the country, meeting the “New Sanitation Legal Framework” would require an annual investment of USD10 billion – more than four times the average annual investment in the sector over the past five years.


  • Corsan joined IFC’s Utilities For Climate (U4C) initiative to get advice from IFC on addressing losses in water distribution (advisory supported by the Government of Japan), and improve energy efficiency, obtain a loan to finance investments, and join a network of likeminded and dynamic utilities worldwide for knowledge-sharing of best practices.
  • IFC is taking the first tranche of USD57 million as a sustainability-linked loan as part of a USD83 million project loan to replace obsolete pumps and hydrometers throughout Rio Grande do Sul’s water distribution network.
  • Corsan will benefit from an interest rate reduction of 10bps if it can meet the 35% water loss target by 2024.


Results and impact

The IFC loan to Corsan was one of the IFC’s first sustainability-linked loans in the infrastructure sector, and the first in Latin America. The Corsan loan contributed to the IFC’s largest fiscal year involvement with Brazil, which totaled USD2.85 billion in 2021. This included USD960 million in institutional capital mobilised through PPPs.

The 2020 Framework will likely lead to further opportunities to mobilise institutional capital in the water sector in Brazil, as it calls for public tenders for concession contracts.

Key lessons learnt

IFC can provide financing to specifically target sustainable development goals (SDGs) – in this case, SDG 6, which calls for ‘availability and sustainable management of water and sanitation for all’. IFC can also leverage its financial influence to ensure greater efficiency in state utility providers. As part of the sustainability-linked loan, Corsan created a social and environmental action plan to improve governance, risk identification, grievance procedures, and more.

The liberalisation of utilities sectors – such as the  water sector in Brazil under the 2020 Framework – provides an opportunity for multilateral players to fill a larger role in funding essential infrastructure and encourage further institutional participation.

Financing details

Click to enlarge the financing details

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