Brazil water sector reforms and constitutional amendment

In early July 2026 Brazil’s lower house approved Bill 1845/25, amending the Basic Sanitation Law to replace minimum‑consumption fees with a fixed basic tariff plus a usage‑based charge. The same month deputies began reviewing Project Bill 675/26, which would levy a 7 % charge on water extracted from federal sources and allocate the revenue to municipalities (65 %), states (25 %) and the Union (10 %). On 22 July 2026 Deputy Alencar Santana (PT‑SP) introduced a constitutional amendment to add potable water to the list of fundamental social rights in article 6 and create article 175‑A, defining water supply as an essential, indelegable service that must be provided directly by the State or a publicly‑controlled entity. The amendment bans privatization, concessions, PPPs and any transfer of control over water infrastructure, while granting a five‑year transition period for existing private contracts and mandating a minimum supply for households unable to pay.

A week later, analysts reported that financing for the sector remains strained. Six years after the Marco Legal do Saneamento Básico, private capital exceeding R$ 420 billion has been attracted, yet 43.3 % of the population still lacks sewage collection and 15.9 % lacks piped water. High real interest rates and limited credit have made long‑term projects unattractive, prompting investors to favor thematic bonds such as Sabesp’s US$ 1.5 billion blue bond and Iguá’s green debentures. Recent PPP auctions in Ceará and Goiás saw several lots receive no bids, underscoring investor caution amid costly financing and uncertain revenue guarantees.

Together, the legislative package and the emerging financing challenges illustrate a broad parliamentary drive to overhaul water pricing, improve transparency, redistribute water‑related revenues to sub‑national governments, and enshrine universal access to water as a constitutional guarantee, while confronting the reality of limited funding for full service expansion.