IIC disburses first loan in Brazilian Reais to Aegea Saneamento e Participações

04/26/2016

The Inter-American Investment Corporation (IIC), acting on behalf of the Inter-American Development Bank (IDB) Group, made the first disbursement of a BRL 320 million (approximately US$95 million) corporate loan to Aegea Saneamento e Participações S.A. (Aegea). This is the IIC’s first disbursement of its first loan approved under the Brazilian Reais Local Currency Initiative, which seeks to eliminate foreign exchange risk exposure in tariff-sensitive infrastructure projects in Brazil.

The loan will support Aegea’s water and sanitation network expansion and the improvement of operational performance. The company has 40 concessions in 44 cities across Brazil, accounting for 18 percent of the private sector’s participation in the water and sanitation sector in the country.

By providing financing in Brazilian Reais under longer tenors, the IIC enhances Aegea’s financial sustainability, offering a loan term aligned with the long-term nature of the company’s investments. The 12-year door-to-door loan in local currency will avoid exposing the company’s debt to foreign exchange fluctuations.

As part of its engagement with the IIC, Aegea has participated in an IDB Group-led sustainability initiative that included an assessment of Aegea’s water loss reduction program. Through these studies, the IDB Group has identified Aegea’s best practices, and recommendations were made to further improve performance.

About the Inter-American Investment Corporation (IIC)

The Inter-American Investment Corporation (IIC), a member of the Inter-American Development Bank (IDB) Group, is a multilateral development bank committed to supporting the private sector in Latin America and the Caribbean. The IIC finances sustainable enterprises to achieve financial results that maximize social and environmental development for the region. With a current portfolio of $7 billion under management and 330 clients in 20 countries, the IIC works across sectors to provide innovative financing and advisory services that meet the evolving demands of its clients.

About Aegea Saneamento e Participações S.A.

Aegea is a Brazilian holding founded in 2010. It manages public concessions, handling the processes related to the life cycle of water, including production, storage, collection and wastewater treatment. Aegea currently covers 18 percent of the private sanitation market in 44 Brazilian cities within 8 states through its concessionaires, private-public partnerships (PPPs) and service companies. The company is 76.2 percent owned by the Brazilian Equipav Group, 18 percent by the Government of Singapore Investment Corporation (GIC), 3.3 percent by the International Finance Corporation (IFC) and 2.5 percent by the Global Infrastructure Fund (GIF), which is managed by IFC’s Asset Management Company.