The Inter-American Development Bank today announced the approval of a $200 million loan for the second stage of a massive clean-up project to improve the environmental quality in the Tietê River watershed that drains the metropolitan area of São Paulo, the industrial heartland of Brazil.
The resources will enable the Companhia de Saneamento Básico do Estado de São Paulo* to continue to make investments in sewer systems, pumping stations, piping, and water treatment, as well as continuation of the plan to reduce pollution in the Tietê River caused by industrial waste.
In addition, the resources will enable the company to make operational improvements, applying new technologies, and a strategy for the state’s sanitation sector will be developed that is expected to provide for greater private sector investments.
An environmental education program will be launched to raise the awareness of residents in the metropolitan area as to the need of proper garbage disposal in the effort to clean up the Tietê River.
The first stage of the Tietê River cleanup project, supported by $450 million in IDB financing approved in 1992, reduced organic industrial discharges by 61 percent and inorganic industrial loads by 77 percent, among other improvements.
Stage II of the project, in addition to other benefits, is expected to raise the amount of treated sewage in the metropolitan area from 48 percent to 55 percent and to hook up an additional 400,000 households to the sewer system.
In other financing to enhance the environment of São Paulo, in 1994 the IDB approved a $302 million loan to assist the city in improving its drainage system.
The current loan is for a 25-year term, with a three-year grace period, at the variable annual interest rate, now 6.84 percent. Local counterpart funds total $200 million.