IDB backs Brazil with $2 billion to fix basic sanitation

The Inter-American Development Bank (IDB) has signed off on a $2 billion credit line to help Brazil expand basic sanitation, the bank said. The money will back projects that improve water supply, sewage, drainage, and solid waste management, with a focus on closing regional gaps and making cities more resilient to climate shocks. The first slice of that funding is a $204 million loan for Belo Horizonte, in the state of Minas Gerais.

In Belo Horizonte, the program will help move more than 6,200 people out of high-risk areas into safer housing or compensate them so they can relocate. Around 47,500 residents are set to gain access to wastewater treatment for the first time. Early warning systems for floods and other extreme events will be upgraded to cover about 2.5 million people across the city.

On the ground, the money will pay for new drainage works—both small neighborhood systems and larger citywide structures—plus upgrades to wastewater interceptors. It will also support urban improvements, new housing units for resettled families, and better access roads and public spaces in low-income areas.

The package goes beyond concrete and pipes. It includes modernizing Belo Horizonte’s hydrological monitoring network and flood alert system, and rolling out an Urban Water Management Program. That means updating the city’s drainage maps and its Master Drainage Plan so future investments can be better planned.

The $204 million IDB loan has a 23.5-year repayment period, a 7-year grace period, and an interest rate tied to SOFR. The municipality will add $51 million of its own. Over time, the wider $2 billion credit line is expected to help Brazil move closer to universal basic sanitation and reduce health and environmental risks for its most vulnerable communities.