ABSTRACT
This chapter focuses on a case study of the Bahia Water and Sanitation Company S.A. (Empresa Baiana de Águas e Saneamento S.A., or EMBASA), which serves the state of Bahia in the Northeast of Brazil. Rather than recommending a one-size-fits-all financing matrix for the fulfilment of the human right to water and sanitation services, the chapter argues that appropriate financing of water operators depends on users’ ability to pay tariffs and fiscal capacity at state and federal levels, which in turn are conditioned by socio-economic context. While EMBASA has strong revenue generation capacity, the same is not true of other operators in Brazil’s Northeast. As such, public banks have an important role to play in financing public water as part of a broader effort to alleviate poverty and reduce the costs of investment financing.
