Brazil secures $2B IDB credit line to expand sanitation and climate resilience

As part of this broader financing program, the IDB Board also approved the first individual operation of $204 million to support an integrated urban and environmental resilience program in Belo Horizonte, Minas Gerais.

The Inter-American Development Bank (IDB) has approved a Conditional Credit Line for Investment Projects (CCLIP) worth up to $2 billion to help Brazil improve sanitation access, environmental resilience, health outcomes, and socio-economic inclusion. This long-term framework will support the universalization of essential sanitation services, including clean water access, sewage systems, solid waste management, and stormwater drainage infrastructure.

The initiative aims to reduce regional inequality, improve environmental sustainability, and strengthen Brazil’s ability to respond to climate change—particularly severe flooding, which has become more frequent due to rising temperatures and extreme rainfall events.

As part of this broader financing program, the IDB Board also approved the first individual operation of $204 million to support an integrated urban and environmental resilience program in Belo Horizonte, Minas Gerais.

Through this first program:

• 6,200 vulnerable residents will be relocated from high-risk flood and landslide zones into safer housing or compensated.

• Over 47,500 people will gain access to improved wastewater treatment.

• Nearly 2.5 million residents will benefit from strengthened early warning systems for natural disasters.

The investment will support construction of micro and macro drainage systems, wastewater interceptors, upgraded urban spaces, and new housing units for resettled families. It will also help rehabilitate public roads and expand access to essential services.

A significant portion of the funding will modernize Belo Horizonte’s climate response systems through:

• Upgraded hydrological monitoring tools

• Improved flood early warning technology

• Updated infrastructure registries

• Expansion of the Urban Water Management Program

• Development of an updated Master Drainage Plan

The first loan under the credit line includes a 23.5-year repayment term, a 7-year grace period, and a SOFR-based interest rate, with $51 million in matching local funds.

The IDB emphasized that the credit line is designed to be scalable and support future operations across Brazil, particularly in cities facing infrastructure constraints, climate risk, or sanitation gaps. The initiative aligns with global Sustainable Development Goals (SDGs), particularly SDG 6 (Clean Water and Sanitation) and SDG 11 (Sustainable Cities and Communities).