Copasa privatization in Brazil

In mid‑June 2026, the Minas Gerais state‑owned water and sanitation firm Copasa was sold for over R$ 8 billion. Equatorial Energia acquired a 30 % stake and became the reference shareholder, while the state retained a 5 % golden share that grants veto power. The deal transferred control of a utility serving 636 municipalities and raised concerns among staff and unions about potential job cuts.

Analysts quickly upgraded Copasa’s valuation. Citi lifted its price target to R$ 79 from R$ 55, and XP Investments raised its 2027 target to R$ 88.3, also setting a target for Equatorial (EQTL3) at R$ 61.7. XP highlighted an internal rate of return of 12.1 % and a projected dividend yield near 13 %, noting that Equatorial’s involvement could bring operational clarity similar to the Sabesp turnaround. For Equatorial, the transaction implied a historic discount with a real IRR of roughly 12.7 % (about 14 % when excluding its stakes in Sabesp and Copasa).

Copasa announced a debenture programme authorising up to R$ 1.2 billion in two‑year non‑convertible bonds to fund its investment plan, capital‑raising and working‑capital needs. Consumer groups warned about possible tariff impacts, the future of low‑income subsidiary Copanor, and the need to extend service contracts to 2073. The market view remains cautiously optimistic about Copasa’s growth and dividend potential following privatization.