PPIAF Supports a Water Utility in Brazil’s Frontier Region
PPIAF’s Sub-National Technical Assistance (SNTA) provided technical assistance in 2010 to help the Brazilian water utility (DESO) prepare financial projections and a credit memorandum on the company.This support helped DESO to secure a BRL 18.9 million financing by substantially improving the company’s ability to interact with financiers.
The water company owned by the Brazilian state government of Sergipe (“DESO”) had gone through several years of mismanagement when, in early 2007, the state government decided to hire professional managers to run the company. Although the results of the management change were starting to show, the company still did not have access to commercial sources or to local development finance institutions. DESO could not adequately demonstrate the impact of the financial and operational turnaround being implemented to the potential financiers. Furthermore, they did not have sufficient capacity or experience to prepare a forward-looking view that investors and financiers would normally request.
