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Water and sewage in Brazil: mandatory bidding, 2033 universal service targets and what concession contracts must contain

Last verified: 2026-10-27 · Status: Stable

Since the 2020 sanitation framework, private operators enter Brazilian water and sewage only through concessions won in public bidding, with contracts that must hit 99 percent drinking water and 90 percent sewage coverage by 31 December 2033, extendable to 1 January 2040 only for regional blocks proven unviable. Contracts must spell out targets, alternative revenues, the indemnity method for unamortized assets and risk allocation, and may provide for arbitration seated in Brazil in Portuguese. Federal funding is conditioned on following ANA reference norms and on regionalized service.

Key facts

Drinking water coverage target by 31 December 2033	99 %Lei nº 11.445 art. 11-B, as of 2026-10-27 · in force
Sewage collection and treatment target by 31 December 2033	90 %Lei nº 11.445 art. 11-B, as of 2026-10-27 · in force
Latest extended universalization deadline for unviable regional blocks	2040-01-01 dateLei nº 11.445 art. 11-B § 9, as of 2026-10-27 · in force
Years in each rolling window in which targets must be met (3 of the last 5)	3 yearsLei nº 11.445 art. 11-B § 5, as of 2026-10-27 · in force

The rule

1. Water and sewage services provided by any entity outside the administration of the municipality or other holder require a concession contract after public bidding; program contracts, agreements and other precarious instruments are banned. Regular program contracts in force continue until their term.Lei nº 11.445 (sanitation framework), as worded by Lei nº 14.026 of 15 July 2020, Art. 10 caput and § 3, 2007-01-05 official text · verified 2026-10-27 · changed: Lei nº 14.026 of 15 July 2020 required bidding for all non holder operators and banned new program contracts.

2. Sanitation contracts are void unless they contain the essential clauses of the Concessions Law plus expansion, loss reduction, quality and efficiency targets; alternative, complementary or ancillary revenues and their sharing; the method to compute indemnity for unamortized reversible assets; and risk allocation, including force majeure and extraordinary economic events. They may provide for private dispute resolution, including arbitration seated in Brazil and conducted in Portuguese under Lei nº 9.307.Lei nº 11.445, art. 10-A included by Lei nº 14.026, Art. 10-A I to IV and § 1, 2020-07-15 official text · verified 2026-10-27

3. Contracts in force, including amendments and renewals, and contracts from bidding are conditioned on proof that the operator has the economic and financial capacity, from own funds or debt, to reach universal service in the area by 31 December 2033.Lei nº 11.445, art. 10-B included by Lei nº 14.026, Art. 10-B, 2020-07-15 official text · verified 2026-10-27

4. Contracts must set targets of 99 percent of the population with drinking water and 90 percent with sewage collection and treatment by 31 December 2033, plus targets for continuity of supply, loss reduction and treatment quality. Targets are phased in proportionally from signature and checked annually by the regulator over rolling five year windows, in which they must be met in at least three years, with the first check only at the end of the fifth contract year. Missing them opens a regulatory process that can end in forfeiture.Lei nº 11.445, art. 11-B included by Lei nº 14.026, Art. 11-B caput and §§ 3, 5 and 7, 2020-07-15 official text · verified 2026-10-27

5. Where bidding studies for regionalized service show universal service by 2033 is not financially viable even after grouping municipalities of different sizes, the deadline may be extended up to 1 January 2040 with the regulator's prior consent, having regard to affordable tariffs. Provisional contracts not formalized and contracts renewed in breach of the law are irregular and precarious.Lei nº 11.445, art. 11-B included by Lei nº 14.026, Art. 11-B §§ 8 and 9, 2020-07-15 official text · verified 2026-10-27

6. Federal funds and financing with Union managed resources are conditioned on, among others, the provider's performance and efficiency indices, compliance with ANA reference norms for sanitation regulation, water loss indices set by the Ministry of Cities, data reporting, regionalized service and adherence to the regional governance structure within 180 days of its creation.Lei nº 11.445, art. 50 as worded by Lei nº 14.026 and Lei nº 14.600 of 19 June 2023, Art. 50 I to IX, 2007-01-05 official text · verified 2026-10-27

Worked example

A regional block of 40 municipalities is auctioned in 2026 with 30 percent sewage coverage. The winner must phase coverage proportionally toward 90 percent by 31 December 2033 (Lei nº 11.445 art. 11-B § 3), proving the capacity to fund it (art. 10-B). The regulator first checks targets at the end of the fifth contract year and then annually, requiring compliance in at least three of the last five years (art. 11-B § 5). If the bidding studies showed 2033 was unviable, the notice could set a deadline up to 1 January 2040 with regulator consent (art. 11-B § 9).

Step by step

1. Track state and municipal auction pipelines for regional blocks and state utility privatizations.
2. Review the draft contract for the art. 10-A clauses: targets, revenues, indemnity method, risk allocation and arbitration.
3. Build the capex plan to the 99 and 90 percent targets and prove financial capacity under art. 10-B.
4. Check that the regulator follows ANA reference norms, which conditions federal funding.
5. Manage the five year target windows and the regulator's annual checks.

Common traps

Legacy program contracts and provisional arrangements are a diligence point: those renewed in breach of the law are irregular and precarious (art. 11-B § 8).
Arbitration in sanitation contracts must be seated in Brazil and conducted in Portuguese (art. 10-A § 1).
Missing targets can lead to forfeiture after the regulatory process (art. 11-B § 7).
Water use permits held by state companies may be split from the concession under long term bulk water contracts (art. 10-A § 2).

Sources

Lei nº 11.445 (sanitation framework), Congress normas.leg.br

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