Accelerated
At least 67 new sanitation projects are now moving forward, many explicitly structured to attract international capital.
The financing model mirrors the UK’s post-1989 settlement. Infrastructure is no longer funded primarily through public investment, but through borrowing.
In Brazil, the key instrument is incentivised debentures, tax-exempt bonds sold to investors, which resembles the bond-heavy structures used by British water companies after privatisation.
Gerbase describes how Brazil’s 2020 sanitation reforms accelerated privatisation and shifted financial risk onto the public.
“After the 2020 sanitation reforms, privatisation accelerated and international investors moved in. Incentivised debentures became a key tool, allowing companies to raise large sums quickly while the real cost is carried out by the public, not by companies or local authorities.”
Incentivised
Between 2017 and 2024, nearly R$ 40 billion (£5.5 billion) was raised through these instruments in Brazil’s sanitation sector. More than half of this money wasn’t used to improve infrastructure, but to pay concession fees for refinance debt.
This closely reflects the UK experience, where borrowing has been used to sustain corporate balance sheets rather than upgrade deteriorating systems.
Gerbase stresses that the use of incentivised debentures is a political choice that could be reversed through regulatory change.
“Every incentivised debenture must be approved by the government, and there are already rules defining which projects qualify for the tax benefit.
“Through an executive decree changing the regulation of the incentive, it’d be possible to stop public funds being used to subside privatisation rather than infrastructure.”
Alternatives
A detailed investigation by CICTAR identifies the strongest parallel with the UK in the case of BRK Ambiental, Brazil’s largest sanitation operator, controlled by Canadian asset manager Brooksfield, a major player in Britain’s privatised infrastructure and a familiar presence in the UK water sector.
In Brazil, BRK operates in more than a hundred municipalities and has rapidly expanded through debt-backed acquisitions.
The company has raised over R$12 billion (£1.6 billion) in debt, generating substantial interest payments, while average tariffs increased by more than 70 per cent between 2017 and 2024, far above inflation levels.
Gerbase explains how financialised concession models limit real investment, leaving poorer communities with inadequate alternatives.
“These populations aren’t completely without solutions, but alternatives like septic tanks are only accessible to people with the financial means to build them.
Distant
“When companies spend large sums on concession fees and debt, very little is left for expanding and improving infrastructure. That’s exactly what the BRK model shows.”
For UK households served by Thames Water, this story is well known. Rising bills are paired with rising debt, while environmental performance worsens and promised improvements fail to arrive.
Thames Water serves roughly a quarter of the population. Since privatisation, household bills have risen by roughly 40 per cent in real terms, while investment has fallen by around 15 per cent. Leakage remains widespread and rivers are routinely polluted with untreated sewage.
Thames Water’s failures are not an isolated case. This month, South East Water left at least 30,000 households without running water for several days, exposing the fragility of a system shaped by fragmented ownership and financialisaton.
South East Water is jointly owned by an Australian infrastructure fund, a Canadian private equity firm and the NatWest pension fund, underscoring how essential services are increasingly run by distant investors with no real stake in places affected by failures.
Regulation
Despite environmental failures, Thames Water accumulated tens of billions of pounds in debt, much of it used to finance shareholder payouts.
In 2023, it was fined £122.7 million for environmental breaches and now survives through emergency regulatory intervention.
Brazil’s moving in the same direction, but with weaker regulatory institutions and deeper inequality.
CICTAR records that BRK subsidiaries have been fined nearly R$50 million (£6.9 million) for environmental violations, including sewage discharges and failure to deliver contracted works. Complaints over water quality, billing and service interruptions are widespread.
Gerbase argues that regulation in Brazil tends to intervene only after harm has already occurred, offering limited accountability during long concessions.
Public
“Regulation is not very effective. What usually happens is that problems escalate until fines and sanctions have already failed to change company behaviour.
“The biggest moment for accountability comes when a concession ends and the process starts again, because public scrutiny increases. But in BRK’s case, most concessions still have many years left to run.”
As in the UK, regulation is slow and fragmented. Long term contracts limit public oversight, while political leaders are reluctant to challenge powerful private operators.
Parliamentary inquiries in Brazilian states such as Tocantins have raised concerns about accountability, echoing debates long familiar in Britain.
Research evidence undermines the case for privatisation. A comparative study published in Frontiers in Water found that public sanitation providers in Brazil frequently outperform private ones on efficiency, service quality and equity, directly challenging claims that private ownership delivers better outcomes.
Logic
This is fundamentally an environmental justice issue. The United Nations recognises access to water and sanitation as human rights, yet privatised systems allocate access according to profitability, not social need.
In both Brazil and the UK, the same communities pay the highest price. Poorer areas face higher bills, worse service and greater exposure to pollution.
Smaller municipalities in Brazil, like deprived areas in the UK, are less attractive to investors because returns are slower and risks higher.
Reports suggest that Brooksfield is preparing to sell BRK Ambiental, treating it as a mature asset. If the UK experience is any guide, the likely legacy will be a heavily indebted operator with limited capacity to invest, while communities remain locked in long term contracts they didn’t design.
For UK readers, the lesson is clear. Britain’s water crisis isn’t an exception, it’s a template. From the Thames to Brazil, the same financial logic produces the same results: polluted rivers, rising bills, weakened accountability and deepening inequality.
Asset
“The UK is a major warning sign of how things can go wrong. Our research shows that Brazil is heading in the same direction, even if it has not fully collapsed yet,” Gerbase concludes.
Environmental justice means rebuilding public control, prioritising ecological repair, and measuring success in clean rivers, public health and dignity, not investor returns and exit strategies.
Brazil’s being sold the same promises Britain heard more than 30 years ago. In the UK, the outcome is already visible in polluted rivers and failing infrastructure.
That alone should make us deeply sceptical of treating water, anywhere, as just another asset.
This Author
Monica Piccinini is a regular contributor to The Ecologist and a freelance writer focused on environmental, health and human rights issues.