Brazil is living a sanitary and public health crisis. Over 34 million Brazilians don’t have access to running water and over 90 million live without proper sewage. The good news is that there has never been this many resources aimed at changing this reality. Since the legal landmark of sanitation in 2020, which modernized the framework and brought the private sector to invest heavily in water and sewage, there have been 66 auctions and 370 billion Brazilian reais in hired investments for the next few decades in over 1.550 cities, according to the Trata Brasil institute. The sector, which in 2020 had only 3 billion in private support, saw this number increase more than ninefold and break records in 2025, with 29.8 billion reais invested. This inflow of capital has moved Brazil closer to the annual volume needed for universal water and sewage access by 2033 – around 45 billion reais each year.

With states and municipalities still facing fiscal restrictions, the good news is that there is more money coming: between the last quarter of 2025 and the whole year of 2026, there will be at least 27 auctions held, with a prediction of 88.6 billion reais in investments through contracts, in a last great cycle of sanitation contests. “We are seeing the consolidation of a new market. The investment was much needed, and the State has no resources to meet the deadline. That’s why concessions and public-private partnerships (PPPs) were chosen”, affirms Nelson Barbosa, director of Planning and Institutional Relations of the National Bank of Economic and Social Development (BNDES).

First in line is Pernambuco, whose partial concession auction of the local sanitation company Compesa happens on the 18^th of December. There will be two blocs covering 185 municipalities and the Fernando de Noronha archipelago, in a project structured by the BNDES, with an estimated investment of 18.9 billion reais throughout the contract. Compesa will remain responsible for catchment, treatment and supplying of water for 174 cities and will act in sanitary sewage in one of the blocs. “I believe there will be a lot of interests in these new projects”, says Barbosa. The cycle, which will advance through 2026, projects a hitherto unseen concentration of investments in the North and Northeastern regions of the country (see image in page 78). Of the 9 predicted billionaire blocs, six will be in these regions, with 54 billion reais invested. Maranhão will have a bloc covering 214 municipalities and a total of 18.4 billion reais in total investment, leaving out only three cities of the state, which today have private concessions. The states of Paraíba (3,45 billion reais), Rondônia (with two projects that add up to 7.5 billion reais) and Alagoas (1.7 billion reais) are also pushing for auctions. These are states which have a history of inefficient public operation and coverage below the national average in common. In the Northern region, for instance, catchment and treatment levels are of 22.8%, and access to running water is of 60,9%. The challenge of concessions and PPPs in these regions is to balance the necessities: relevant investment with lower taxes, which results in lower grants, which means less capital to the states with the auctions. “The market moment is so special that even in these contracts it is rare to see water auctions and barren sewers”, says Guilherme Naves, an associate of the consultancy company Radar PPP.

Outside of the North-Northeast axis, São Paulo conducts the largest state project in the country. The so called Universaliza, in structuring stage, predicts 20 billion reais in investments to service in the upcoming decades 218 municipalities which are out of reach of the local sanitation company Sabesp. The cities will be divided into four blocs which will be put up for auction. Public consultancy should happen between April and May 2026: and the auction, in September of the following year. “We will use the same regulation in Sabesp’s contract, which I consider to be the most adequate for the sector”, says Natália Resende, secretary of Environment and Infrastructure of the State of São Paulo. The great differential of this contest, according to Resende, will be the inclusion of urban draining, which potentially avoids flooding and contamination of hydric resources.

“We are considering the inclusion of drainage in some projects. If this happens, the value of investments should increase”, she says. The secretary also affirms that, despite Sabesp’s natural recently-privatized synergy, already acting in 371 cities in the state, the important is good contracts and regulation. “The best player, be it Sabesp or any other, will be that which accepts and fulfill regulations”, she affirms.

With Universaliza’s sheer magnitude in São Paulo and of other auctions across Brazil, such as in Goiás and Minas Gerais, competition intensifies. The perspective of people involved in the structuring of these projects is that sanitation companies such as Sabesp, Aegea and Sanepar, in their possible partnership with the construction company Acciona, will be protagonists in the next contests, even in a scenario of high leverage. “Sabesp’s CEO, CarlosPiani, has already publicly announced his intention to join the auctions. Sanepar has already gathered strength by rehearsing an association with Acciona. We are in a moment of consolidation of big groups”, says Christianne Dias Ferreira, executive director of Abcon Sindcon, association with gathers the main private sanitation companies in the country. The executive believes that this moment is only possible because of the mature shaping of contracts and the natural learning curve. “Today, we only don’t see interested parties whtn there are issues in contract structuring. The sector has evolved”, affirms Ferreira. There is also the projection of new entries, which include engineering firms, already providing services to state owned businesses, in addition to investment funds, besides players of other sectors in infrastructure. “The entrance of Equatorial in in Sabesp is a great example. This can be a sign of movement of other infrastructure companies, even from abroad, migrating to our sanitation sector”, says Gustavo Carneiro, consultant of the law office Pinheiro Neto. In the midst of the end of the great contests, a movement of greater consolidation of the sector, with fusions and acquisition is expected, as the pipeline fragments itself in municipal projects of smaller scale. “Investors who entered and saw the project perform above expectations can sell before the end of the concession, at a premium, attracting other groups with higher expectations for efficiency,” says Carneiro. The forecast is that, in a scenario of falling interest rates over the next few years, this movement will accelerate.

With the high volume of investments contracted, the next challenges go beyond bidding: delivery will be necessary. Over the next eight years, almost all Brazilian municipalities will have sanitation works in progress. The volume of simultaneous interventions is a concern, as it puts pressure on labor, suppliers, and the local management structure. “The progress and completion of the works within the deadlines may encounter obstacles that will require adaptation with coordinated actions,” says Gesner Oliveira, professor at Fundação Getúlio Vargas (FGV), partner at GO Associados, and former president of Sabesp. Oliveira emphasizes that companies must invest in professional training, strengthen the capacity of suppliers, and carry out efficient logistical planning to avoid a collapse in the sector in the face of billions in investments. The lack of strengthening of regulatory agencies is also a point of attention. As sanitation is a municipal responsibility, there is concern about the lack of regional agencies to deal with the new situation. “We need stronger subnational regulatory agencies to demand efficiency in the operation and expansion of services,” says Luana Pretto, president of Instituto Trata Brasil.

The interest rate of 15% per year and the 2026 elections are also concerns for experts. “The electoral calendar may lead to legal challenges, involvement of the Courts of Auditors, and affect the progress of auctions,” he says. While the challenges are real, the results so far are also significant. Brazilian sanitation has gone from a stagnant sector, dominated by loss-making state-owned companies and with low coverage, to a competitive field with private operators willing to invest. The 2033 target, set in the legal framework, still seems distant — but for the first time, it is not unattainable. There is capital, players, technical knowledge, and an evolving regulatory framework. What is lacking, as always in Brazil, is coordination. The latest wave of auctions may not solve the historical deficit, but it will leave a legacy of learning and infrastructure that the country has never had. The future of sanitation will not be auctioned off — but it will inevitably pass through these auctions.