Brazil: US$ 50 Million For Improved Solid Waste Management

November 4, 2010

WASHINGTON, November 4, 2010 – The World Bank approved a US$ 50 million loan for Brazil’s Integrated Solid Waste Management and Carbon Finance Project. The financing, for Brazil’s Caixa Econômica Federal bank, will support the reduction of pollution, greenhouse gas emissions and environmental and health impacts related to unsustainable solid waste disposal.

About US$ 2.2 billion are spent on solid waste management per year in Brazil, with Caixa Econômica Federal as the main player,” said Makhtar Diop, World Bank Director for Brazil. “The project will help Caixa maximize the environmental, social and economic sustainability of these investments, boost private sector participation and blend all of this with carbon finance resources, leveraging a huge impact.

The national program supported by the loan will close up to six existing dumpsites by 2015, construct sanitary landfills, increase by 4,000 tons per day the volume of waste disposed in environmentally sustainable sanitary landfills, develop alternative waste treatment facilities, and integrate carbon finance in these activities.  It will also address social issues linked to solid waste management by developing strategies to improve living conditions, create jobs and reduce health risks to waste pickers and people living on existing dumps.  More than half of Brazilian cities have waste picker populations.

The project will help strengthen Caixa’s capacity to design appropriate lending products for investments in the solid waste sector, preparing and managing carbon finance projects, and structure mixed (lending/carbon finance) operations. This will help boost public sector capacity, particularly in municipalities and financial institutions, to attract private sector investments for final treatment and disposal of solid waste. Brazil has been among the most proactive countries in pursuing Clean Development Mechanism (CDM) carbon finance opportunities, and is currently third in the world (after China and India) in number of ongoing CDM projects.  The Caixa initiative is likely to boost Brazil’s carbon projects in the solid waste management sector.

This project comes at a crucial time, as the National Solid Waste Management Policy was sanctioned in August 2010 and will spur investments in the sector,” said Paul Procee, World Bank Project Manager. “The project will contribute to developing innovative and sustainable frameworks for solid waste management, reduce environmental impacts and improve the livelihoods of waste pickers currently living and working on hazardous dumpsites.”

This US dollar-denominated disbursement-linked IBRD Flexible Loan with a fixed-spread, has level payments of principal and a four-year grace period, with 19 years of total loan term with all conversion options selected. Since 1971, the World Bank has invested approximately US$ 4.4 billion in urban and sanitation projects in Brazil, including this loan.

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