project for regionalized concession of water …€¦ · rh i - baia da ilha grande rio cantagalo...

STAGE 5 - BUSINESS PLAN

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REFERENCE BUSINESS PLAN

BLOCK 3

PROJECT FOR REGIONALIZED CONCESSION OF WATER SUPPLY AND SANITATION SERVICES IN THE MUNICIPALITIES OF RIO DE JANEIRO STATE CURRENTLY SERVED BY CEDAE

REFERENCE BUSINESS PLAN - BLOCK 3

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SUMMARY

1 Presentation ........................................................................................4

2 Introduction ........................................................................................6

2.1 Territorial Characterization and Municipalities Served in the Project - Block 3 .....6

2.2 Executive summary ......................................................................... 13

3 Projections and Premises - BLOCK 3 .......................................................... 16

3.1 Revenue ...................................................................................... 16

3.1.1 Default .................................................................................. 18

3.2 Investment ................................................................................... 19

3.2.1 Investment Valuation Premises ...................................................... 21

3.2.2 Projection of Investments ............................................................ 22

3.3 Operating Costs ............................................................................. 25

3.3.1 Operating Cost Assessment Premises ............................................... 25

3.3.2 Cost Projection ........................................................................ 28

3.4 Working Capital ............................................................................. 29

3.5 Taxation ...................................................................................... 29

3.5.1 Tax Immunity .......................................................................... 29

3.5.2 Taxation on Revenue .................................................................. 29

3.5.3 Taxation on Profit ..................................................................... 31

3.6 Financing Structure ......................................................................... 32

3.6.1 Bridge Financing ....................................................................... 32

3.6.2 Long Term Financing .................................................................. 33

3.6.3 Covenants ............................................................................... 33

3.6.4 Tax Shield .............................................................................. 34

4 Attachments ...................................................................................... 36

4.1 Active Water Units Projections ........................................................... 36

4.2 Active Sewage Units Projections .......................................................... 37

4.3 Water Revenue Projection ................................................................. 38

4.4 Sewage Revenue Projection ............................................................... 39

4.5 Default Projection .......................................................................... 40

4.6 Water and Sanitation Investment Projection ........................................... 41


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1. PRESENTATION


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1 PRESENTATION

This document was prepared based on information provided by employees and

collaborators from Cedae, BNDES, municipal governments and Rio de Janeiro State

Government, in addition to primary and secondary sources of information gathered by

CONSORTIUM FATOR/CONCREMAT/VGP - RIO DE JANEIRO SANITATION. Such information

was considered truthful, therefore, the Consortium does not undertake any liability for the

accuracy of the information from reports and/or other documents provided by the sources

consulted.

The figures presented in this report may undergo updates and/or monetary corrections,

leading to potential future changes in the information and projections presented herein.


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2. INTRODUCTION


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2 INTRODUCTION

This Report presents the project for the Regionalized Concessions of the water supply1

and sanitation services2 of all the municipalities in the state of Rio de Janeiro currently

served by CEDAE, and, for municipalities served by large production systems in the

Metropolitan Region of Rio de Janeiro, the concession of water supply will only be of the

system called “downstream”, which covers the water distribution systems to end users from

CEDAE's water macro meters, in addition to the sewage system.

Such delegations will be granted to private companies directly by the State of Rio de

Janeiro, through public bidding and from a delegation originally received from the holders

of the sanitation service. Water production in the municipalities where the private

contractor will operate downstream will continue to be the responsibility of CEDAE. This

Company will be responsible for the abstraction and treatment of raw water and the delivery

of treated water at appropriate standards and quality levels. The relationship between

CEDAE and the concessionaire will be governed by an Interdependence Agreement to be

entered into between the parties, which will establish the water purchase price and the

governance of the operation.

In all 64 municipalities to be granted, the commercial management of water and

sanitation services will be the responsibility of the private contractor, except in those

locations where this commercial management is already performed by some other

concessionaire.

2.1 Territorial Characterization and Municipalities Served in the Project - Block 3

The study covers the economic and financial assessment of the water supply and

sanitation systems of the urban areas of the 64 municipalities in which Cedae operates at

least the water supply main system, including the 114 districts of the municipalities, i.e.,

regardless of the concessionaire operating the system, except for the sanitation systems

already under concession for private contractors in the following locations: Macaé, Rio das

Ostras, São João do Meriti, Saquarema and the AP5 of the city of Rio de Janeiro, besides the

sanitation system of the city of Maricá, which will be operated by its own municipality

government. The following results refer to the municipalities and districts of the

municipalities of Block 3.

1 Consisting of the services, infrastructure and facilities necessary for the public supply of drinking water, from abstraction to household connections and their measurement instruments. 2 Consisting of the services, infrastructure and operational facilities for collection, transportation, treatment and final disposal of sewage, from the household connections to their final disposal into the environment, for a period of 35 (thirty-five) years.


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Table 1: lists the municipalities of the study and includes the current contractor for

each type of service and Figure displays the spatial location of each municipality.

It is also worth mentioning that Saquarema's water supply system is restricted to the

Jaconé neighbourhood, since the rest of the municipality is also operated by a private

concessionaire.

The Business Plan was based on the geographic separation by block, showing greater

technical-operational feasibility, given that in some cases the operation of water and

sanitation services can sometimes be limited to this geographic area. It is worth mentioning

that CEDAE will continue to produce and treat water and sell to the respective

concessionaire in the following municipalities: Rio de Janeiro; Nova Iguaçu; Duque de Caxias;

São João de Meriti; Belford Roxo; Nilópolis; Mesquita; Itaguaí; Queimados; Seropédica;

Japeri; Paracambi and Maricá, until the implementation of the new water production

system.

The areas operated by CEDAE were divided into four blocks, with the municipalities in

block 3 listed in the table below:


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Table 1: List of Water and Sewage System Providers

No. Municipality Contractor

Contractor's acronym Type of service

GE019 - Where it provides water supply

GE020 - Where it provides sanitation services

1 Angra dos Reis Companhia Estadual de Águas e Esgotos CEDAE Water Municipal Main Region Does not serve

Angra dos Reis Independent Water and Sanitation Service

SAAE Water and Sanitation

Both Both

2 Engenheiro Paulo de Frontin Companhia Estadual de Águas e Esgotos CEDAE Water Both Does not serve

3 Itaguaí Companhia Estadual de Águas e Esgotos CEDAE Water and Sanitation Municipal Main Region Municipal Main Region

4 Mangaratiba Companhia Estadual de Águas e Esgotos CEDAE Water and Sanitation

Municipal Main Region Municipal Main Region

5 Paracambi Companhia Estadual de Águas e Esgotos CEDAE Water and Sanitation Municipal Main Region Municipal Main Region

6 Piraí Companhia Estadual de Águas e Esgotos CEDAE Water and Sanitation Both Municipal Main Region

7 Rio Claro Companhia Estadual de Águas e Esgotos CEDAE Water Both Does not serve

8 Rio de Janeiro Companhia Estadual de Águas e Esgotos CEDAE Water and Sanitation Municipal Main Region Municipal Main Region

except AP5

9 Seropédica Companhia Estadual de Águas e Esgotos CEDAE Water and Sanitation Municipal Main Region Municipal Main Region

Source: SNIS, 2016 adapted by the Consortium

Shaded: Sanitation Systems granted to private contractors

Note: According to the SNIS classification, the service locations are classified into 03 types: (1: Municipal Main Region; 2: Locations; 3: Both):

- MUNICIPAL MAIN REGION: when the contractor provides services only to the main region of the municipality and does not provide services to locations other than the main

region;

- LOCALITIES: when the contractor does not provide services to the municipality's main region, but it provides services to other locations, which do not include the main

region;

- BOTH: when it serves both the main region and other locations.


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Figure : Location of the municipalities and respective operational management of CEDAE


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The city of Rio de Janeiro was divided into Regions, as shown in the table below. Region

3 was included in Block 3:

Table 2: Division of Regions of the City of Rio de Janeiro

Regions Neighbourhoods

Region 1 Botafogo, Catete, Copacabana, Cosme

Velho, Flamengo, Gávea, Glória, Humaitá,

Ipanema, Jardim Botânico, Lagoa,

Laranjeiras, Leblon, Leme, Rocinha, São

Conrado, Urca, Vidigal

Region 2 Anil, Barra da Tijuca, Camorim, Cidade de

Deus, Curicica, Freguesia (Jacarepaguá),

Gardânia Azul, Grumari, Itanhangá,

Jacarepaguá, Jardim Sulacap, Joá,

Pechincha, Praça Seca (partial), Realengo,

Recreio dos Bandeirantes, Tanque,

Taquara, Vargem Grande, Vargem Pequena.

Region 3 Bangu, Barra de Guaratiba, Campo dos

Afonsos, Campo Grande, Cosmos, Deodoro,

Gericinó, Guaratiba, Inhoaíba, Jardim

Sulacap, Magalhães Bastos, Paciência,

Padre Miguel, Pedra de Guaratiba,

Realengo, Santa Cruz, Santíssimo, Senador

Camará, Senador Vasconcelos, Sepetiba,

Vila Kennedy, Vila Militar

Region 4 Abolition, Acari, Água Santa, Alto da Boa

Vista, Anchieta, Andaraí, Bancários, Barros

Filho, Benfica, Bento Ribeiro, Bonsucesso,

Brás de Pina, Cachambi, Cacuia, Caju,

Campinho, Cascadura, Catumbi, Cavalcanti,

Centro, Cidade Nova, Cidade Universitária,

Cocotá, Coelho Neto, Colégio, Complexo do

Alemão, Cordovil, Costa Barros, Del

Castilho, Enchanted, Engenheiro Leal,


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Regions Neighbourhoods

Engenho da Rainha, Engenho de Dentro,

Engenho Novo, Estácio, Freguesia (Island),

Galeão, Gamboa, Grajaú, Guadalupe,

Higienópolis, Honório Gurgel, Inhaúma,

Irajá, Jacaré, Jacarezinho, Jardim América,

Jardim Carioca, Jardim Guanabara, Lapa,

Lins de Vasconcelos, Madureira, Mangueira,

Manguinhos, Maracanã, Marechal Hermes,

Maria da Graça, Méier, Moneró, Olaria,

Osvaldo Cruz, Paquetá, Parada de Lucas,

Parque Anchieta, Parque Colúmbia, Pavuna,

Penha, Penha Circular, Piedade, Pilares,

Pitangueiras, Portuguesa, Praça da

Bandeira, Praça Seca (partial), Praia da

Bandeira, Quintino Bocaiúva, Ramos,

Riachuelo, Ribeira, Ricardo de

Albuquerque, Rio Comprido, Rocha, Rocha

Miranda, Sampaio, Santa Teresa, Santo

Cristo, São Cristóvão, São Francisco Xavier,

Saúde, Tauá, Tijuca, Todos os Santos,

Tomás Coelho, Turiaçú, Vasco da Gama, Vaz

Lobo, Vicente de Carvalho, Vigário Geral,

Vila da Penha, Vila Isabel, Vila Kosmos, Vila

Valqueire, Vista Alegre, Zumbi, Ilha do

Governador

The following is information on the geographical characterization, which includes

information on territorial extension and population (total, served with the water service and

served with the sanitation service).

Table 3: Territorial Extension and Population Served

Source: GIS and Cedae

Geographic Characterization Block 3 - 2019

Territorial size (km2) 3,687,567

Total Population (inhab.) 2,084,561

Population served WSS (inhab.) 1,910,951

Population served SSS (inhab.) 69,042


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The table below presents the main water courses of each municipality, which serve the

water supply system, not including any anomalies in the supply, as long as the criteria for

water loss reduction and per capita water consumption are met and they are able to receive

treated sewage.

Table 4: Water Catchments and Rivers

2.2 Executive summary

The Business Plan presented herein is a reference, not binding on the future concession.

Potential bidders should carry out their own studies and estimates in order to participate in

the bidding process and may not claim that the estimates contained herein have not been

achieved as a basis for contract rebalancing claims.

This document contains the following topics:

Opening of (i) Revenue, including Default, (ii) Investment; (iii) Operating Costs; (iv)

Taxation; (v) Financing Structure.

Table 5: Units

The number of water and sewage units projected for the end of the plans is presented

below:

Municipalities Water Unit (End of Plan) Sewage Unit (End of Plan) Water + Sewage Unit (End of Plan)

Angra dos Reis 109.862 98.876 208.738 Engenheiro Paulo de Frontin 6.242 5.618 11.860

Piraí 14.025 12.622 26.647

Rio Claro 8.185 7.367 15.552

Itaguaí 57.532 51.779 109.311

Mangaratiba 22.743 20.469 43.212

Paracambi 21.646 19.482 41.128

Rio de Janeiro Region 3 486.703 - 486.703

Município Bacias Hidrográficas Rios

RH I - Baia da Ilha Grande Rio Cantagalo

RH II - Guandu Rio Grande, Rio Ingaíba, Rio Saí

Angra dos Reis RH I - Baia da Ilha Grande Rios Grataú e do Frade, Rio Bracuí, Rio Ariró, Rio do Meio, Rio Jacuecanga e Rio Jacareí

Itaguaí RH II - Guandu Rio Mazomba, Rio da Guarda

Eng. P. de Frontin RH II - Guandu Rio Macaco, Rio São José

RH II - Guandu Rio Piraí

RH III - Médio Paraíba do Sul Rio Paraíba do Sul

Paracambi RH II - Guandu Córrego dos Macacos, Rio Santana

Seropédica RH II - Guandu Rio Piranema, Rio Piloto, Valão da Areia

Rio de Janeiro Lote IV RH II - Guandu Rio do Portinho, Rio Cação, Canal Guandu, Canal São Francisco, Rio Guandu do Sapé

Mangaratiba

Rio Claro


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Municipalities Water Unit (End of Plan) Sewage Unit (End of Plan) Water + Sewage Unit (End of Plan)

Seropédica 38.508 34.658 73.166

Table 6: Main Results

The main indicators and financial figures of the Block are presented below:

R$ thousand except when indicated

otherwise Block 3

Investments 3.567.686

Water and Sanitation Revenue 41.972.266

EBITDA 16.227.671

Water sale price by CEDAE (R$/m³) 1,40


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3. PROJECTIONS AND ASSUMPTIONS -

BLOCK 3


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3 PROJECTIONS AND ASSUMPTIONS - BLOCK 3

3.1 Revenue

The revenues generated from the provision of water supply and sewage collection and

treatment services were taken into account.

In order to assess the sanitation service revenue, the same water tariff table was applied

on the volume of sewage to be served.

The current average tariff in each municipality for each type of consumption (social,

residential, industrial, commercial and public tariff) and the per capita consumption,

hydrometration and served population values were taken into account in order to calculate

the tariff revenue. For sanitation, an accession rate of 80% was employed.

Based on the studies carried out by the technical team, it was considered that the

private partner would achieve a hydrometric index of 100% by the 5th year of Concession.

Table 7: Average Water and Sanitation Tariffs by Typology

Water (R$/m³)

Municipality Social Tariff Residential Commercial Industrial Public

Angra dos Reis n.a. 4,98 12,21 19,28 8,99 Engenheiro Paulo de Frontin n.a. 4,28 13,91 17,63 8,71

Piraí n.a. 4,18 15,10 17,99 9,06

Rio Claro n.a. 3,99 9,34 19,04 8,87

Itaguaí 2,91 4,70 10,64 21,37 8,95

Mangaratiba 5,89 4,48 11,58 7,35 7,50

Paracambi n.a. 4,27 10,70 21,23 9,43

Rio de Janeiro - Region 3 3,03 4,81 15,17 21,52 10,99

Seropédica 2,92 5,98 15,94 20,98 10,24

It is worth mentioning that the engineering team has adopted the assumption of per

capita water consumption of 200 l/inhab/day in Rio de Janeiro (capital), 150 l/inhab/day in

the other municipalities, 260 l/inhab/day in the irregular areas of the municipality of Rio de

Janeiro. It is worth mentioning that the analysis was based on the current per capita

informed by CEDAE and it was considered that within 10 years the project per capita of the

presented assumption will be achieved. These estimates were considered for the following

reasons: projected loss reduction, greater commercial control, alignment with the per capita

already used by CEDAE in its projections, among others.

Similarly, the target for the total water loss index in distribution is 25%, to be achieved

in 10 years.


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The following is a table with information on the current per capita consumption and loss

index in the municipalities of Block 3, which should be linearly reduced to the mentioned

project values.

Table 8: Current per capita and loss index

Municipality Current Per Capita Current Losses

Angra dos Reis 150 30%

Engenheiro Paulo de Frontin 250 30%

Piraí 230 50%

Rio Claro 235 30%

Itaguaí 200 26%

Mangaratiba 300 25%

Paracambi 196 25%

Rio de Janeiro Region 3 211 35%

Seropédica 280 27%

Among the main levers for revenue growth in the first ten years, the main driver is the

increase in the supply index.

For the sake of caution and due to the difficulty in establishing a driver to project

accessory revenues, the same were not taken into account.

Rio de Janeiro is the municipality that is the most relevant in terms of revenue

throughout all blocks.

Table 9: Water and sewage revenue - Block 3

The graph below presents the annual water and sewage tariff revenue3:

3 Irregular areas are present only in the municipality of Rio de Janeiro

Revenues (R$) 1 2 3 4 5 10 20 30 35

Water 692,797,728 772,586,703 853,972,340 936,354,402 1,019,095,329 1,021,387,960 1,040,557,032 1,028,182,023 1,009,309,707

Sewage 28,651,843 61,285,107 102,290,908 149,236,751 188,468,374 170,426,809 217,926,748 217,483,378 213,534,593

Total 721,449,572 833,871,810 956,263,248 1,085,591,153 1,207,563,702 1,191,814,769 1,258,483,780 1,245,665,401 1,222,844,299


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Graph 1: Revenue - Block 3

3.1.1 Default

The initial projected default value considered the history of CEDAE in each municipality,

and was incorporated into the model to differentiate between invoiced and collected

revenue.

Since practice demonstrates that the private partner has better ability to mitigate

default, due to more effective commercial management, the economic and financial

modeling considered a reduction of default to 10% by the 15th year of the Concession,

established jointly with BNDES on the basis of peers' default4.

The default values of 2018, per municipality of Block 3 are presented below:

Table 10: Default

Municipality Default

Angra dos Reis 38.4%

Engenheiro Paulo de Frontin 28.0%

Piraí 27.8%

Rio Claro 25.3%

4 Analyzing the default of state-owned companies (SABESP, COPASA, SANUPAR) and the main private sanitation companies (GS Inima, BRK, Águas do Brasil, AEGEA), as well as the historical difficulty of billing for sanitation in the downtown area, the assumption of 10% was adopted.

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Ano 1 Ano 2 Ano 3 Ano 4 Ano 5 Ano 6 Ano 7 Ano 8 Ano 9 Ano

10

Ano

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Th

ou

sa

nd

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Water Sewage


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Municipality Default

Itaguaí 34.2%

Mangaratiba 40.5%

Paracambi 39.1%

Rio de Janeiro 23.4%

Seropédica 80.1%

Implied Average 28,8%

Below is a graph with the expected curve of default reduction of the block, until it

reaches 10% in year 15:

Graph 2: Evolution of Default

3.2 Investment

The investments needed to achieve the universalization targets of water supply and

sanitation services were estimated as presented in the tables below, whose evolution is

linear. It is worth mentioning that the municipalities of Eng. Paulo de Frontin, Itaguaí,

Paracambi, Piraí, Rio Claro and Seropédica, located in the Guandu River basin, have the

target of reaching the universalization of water supply and sanitation in only 5 years, in

order to ensure the quality of the water from the main source of water supply of the MR of

RJ.

These projections and the methodology used in the investment estimates are detailed

below.

Table 11: Service Targets - Water (%)

0%

5%

10%

15%

20%

25%

30%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

Inadimplência


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Municipality Year 5 Year 8 Year 10 Year 12 Year 14

Angra dos Reis 94 99

Eng. Paulo de Frontin 99

Itaguaí 99

Mangaratiba 88,5 93,4 96,7 99

Paracambi 99

Piraí 99

Rio Claro 99

Rio de Janeiro Region 3 98,1 99

Seropédica 99

Table 12: Service Targets - Sewage (%)

Municipality Year 5 Year 10 Year 15 Year 18 Year 20

Angra dos Reis 21 44 67 81 90

Eng. Paulo de Frontin 90

Itaguaí 90

Mangaratiba 22,5 45 67,5 81 90

Paracambi 90

Piraí 90

Rio Claro 90

Rio de Janeiro Region 3 (*)

Seropédica 90

(*) Sanitation system already under concession


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3.2.1 Investment Valuation Premises

3.2.1.1 Calculation Basis

The following reference spreadsheets were adopted to calculate the costs of

engineering works and services:

• Bulletin EMOP - Empresa de Obras Públicas do Estado do Rio de Janeiro, base December/2018;

• SINAPI-RJ - Dec/18, exceptionally in the absence of any EMOP unit cost;

• CEDAE benchmark quotes.

For the Indirect Benefits and Expenses (IBE), the value of 24% was used, an average

value admitted by the Federal Audit Court - TCU for basic sanitation works.

3.2.1.2 Parametric Costs and Cost Curves

Two methodologies were used for the preparation of the Capex: parametric cost

calculation and cost curve elaboration.

The parametric costs were used for the following works: water distribution networks

and sewerage, water and sewage connections, internal household connections, replacement

of hydrometers, deep wells, pipelines and discharge lines and operation in irregular areas.

Cost curves were drawn up for the following works: raw water abstraction, water and

sewage treatment plants, water and sewage pumping stations and for water tanks.

3.2.1.3 Reinvestment

For reinvestment, which represents the disbursement with replacement of capital

already invested, the following percentages were adopted in relation to assets, whether

existing or to be built, which were established jointly with CEDAE:

Equipment except PRODUCER SYSTEM: 5% a year

PRODUCER SYSTEM equipment: 2% a year

Telemetry and automation: 5% per year

3.2.1.4 Other Investments

For automation and telemetry, it was considered the cost equivalent to 5% of the CAPEX

of civil works and related equipment (abstractions, treatment stations and lifting stations

and reservoirs) and for studies and designs the value equivalent to 5% of the total cost of

the work, which includes geotechnics and topographic registration services.

For expropriations, the unit cost of the land was obtained through internet research.


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3.2.2 Projection of Investments

The Tables Table 13: Investment Water - Block 3and Table 14: Investment Sanitation

- Block 3present the investment projections for the 35 (thirty-five) years of concession of

Block 3, with the opening of the projections by investment sector (water, sanitation and

production systems) and details of each structure for the highlighted sectors.


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Table 13: Investment Water - Block 3

YEAR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Abstraction (K R$) 1,379 2,897 2,568 2,583 2,598 2,612 2,134 2,144 2,155 865 865 464 464 464 464 464 97 97Water Lifts (K R$) 0 3,554 3,527 3,527 3,527 3,527 1,193 1,058 1,058 0 0 0 0 0 0 0 0 0

Water Pipelines (K R$) 0 436 2,896 37,780 58,572 58,205 27,388 6,159 4,067 0 0 0 0 0 0 0 0 0WTP (K R$) 0 736 1,115 1,065 1,065 736 0 0 0 0 0 0 0 0 0 0 0 0

Reservoir (K R$) 0 8,835 16,639 18,842 27,148 26,300 23,560 16,953 14,434 6,757 7,402 3,989 4,292 4,892 4,255 4,066 2,214 1,613Distribution Networks (K R$) 33,686 75,698 77,788 79,913 82,038 46,345 35,623 35,932 36,240 31,963 29,947 20,998 16,697 16,697 16,697 16,697 8,630 8,630

Water Connections (K R$) 1,476 3,124 3,208 3,294 3,380 1,861 1,517 1,528 1,540 1,275 1,190 802 699 699 699 699 362 362Hydrometers (K R$) 6,637 6,661 6,841 6,655 6,674 7,313 8,117 8,112 8,152 8,216 8,177 8,818 8,819 8,875 8,787 8,723 9,129 9,126

Systems, Designs, Customer Service (K R$) 1,684 4,555 5,484 7,556 9,480 7,661 5,606 3,760 3,416 2,249 2,203 1,382 1,213 1,273 1,232 1,216 647 587Environmental (K R$) 0 1,072 1,424 1,452 1,484 1,330 168 124 120 116 103 123 112 111 120 131 71 71Reinvestments (K R$) 0 0 0 0 0 0 3,445 3,445 3,445 3,445 3,445 3,445 3,445 3,445 3,445 3,445 3,445 3,445

Total Water (K R$) 44,863 107,570 121,490 162,666 195,965 155,889 108,750 79,215 74,624 54,884 53,332 40,021 35,740 36,455 35,699 35,439 24,595 23,930

YEAR 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

Abstraction (K R$) 97 97 97 9 9 9 9 9 9 9 9 9 9 9 9 9 9Water Lifts (K R$) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Water Pipelines (K R$) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0WTP (K R$) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Reservoir (K R$) 799 386 0 95 95 95 77 77 0 0 0 0 0 0 0 0 0Distribution Networks (K R$) 8,630 8,630 6,933 2,138 2,138 2,138 2,138 2,138 579 579 579 579 579 234 234 234 234

Water Connections (K R$) 362 362 362 91 91 91 91 91 29 29 29 29 29 12 12 12 12Hydrometers (K R$) 9,170 9,089 9,030 9,302 9,292 9,337 9,255 9,196 9,337 9,334 9,378 9,297 9,238 9,350 9,347 9,391 9,309

Systems, Designs, Customer Service (K R$) 511 470 347 115 115 115 115 115 29 29 29 29 29 12 12 12 12Environmental (K R$) 68 52 36 14 14 14 14 14 3 3 3 3 3 1 1 1 1Reinvestments (K R$) 3,445 3,445 3,445 3,445 3,445 3,445 3,445 3,445 3,445 3,445 3,445 3,445 3,445 3,445 3,445 3,445 3,445

Total Water (K R$) 23,084 22,530 20,250 15,209 15,199 15,244 15,144 15,086 13,431 13,427 13,472 13,390 13,331 13,063 13,059 13,104 13,022


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Table 14: Investment Sanitation - Block 3

YEAR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Dry Weather Collector (K R$) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Sew age Connection (K R$) 1,579 52,631 55,181 57,719 60,276 12,386 11,261 11,509 11,781 12,013 12,270 10,464 10,641 10,789 10,966 11,129 9,480 9,553Collection Network (K R$) 362 101,572 102,394 101,923 98,075 7,293 8,204 8,204 8,204 8,204 8,204 10,027 10,027 10,027 10,027 10,027 10,939 10,939

Sew age Lifts (K R$) 16,006 16,015 16,015 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0Discharge Lines (K R$) 7,161 7,161 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

STP (K R$) 11,360 45,350 50,845 58,798 33,436 26,597 36,302 45,397 47,113 48,601 40,050 37,314 37,680 35,986 34,064 28,214 115 181Systems, Designs, Customer Service (K R$) 2,475 10,493 11,047 10,564 7,641 2,790 1,209 2,059 2,223 2,317 1,529 1,403 1,435 1,253 1,088 501 547 550

Environmental (K R$) 0 1,476 2,076 1,998 1,913 1,571 69 177 188 184 71 66 67 68 68 69 66 67Reinvestments (K R$) 0 0 0 0 0 0 5,735 5,977 6,382 6,551 6,800 6,884 6,957 7,221 7,221 7,221 7,221 7,221Total Sew age (K R$) 38,943 234,699 237,558 231,011 201,349 50,646 62,780 73,323 75,891 77,870 68,925 66,159 66,807 65,344 63,434 57,162 28,368 28,512

YEAR 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

Dry Weather Collector (K R$) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Sewage Connection (K R$) 9,653 9,726 2,754 951 953 961 951 947 296 309 302 296 290 132 128 123 131Collection Network (K R$) 10,939 10,939 10,939 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Sew age Lifts (K R$) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Discharge Lines (K R$) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

STP (K R$) 115 116 115 0 0 0 67 0 0 0 0 0 0 0 0 0 0Systems, Designs, Customer Service (K R$) 547 547 547 0 0 0 3 0 0 0 0 0 0 0 0 0 0

Environmental (K R$) 67 68 37 5 5 5 5 5 1 1 1 1 1 1 1 1 1Reinvestments (K R$) 7,221 7,221 7,221 7,221 7,221 7,221 7,221 7,221 7,221 7,221 7,221 7,221 7,221 7,221 7,221 7,221 7,221Total Sew age (K R$) 28,542 28,617 21,612 8,176 8,178 8,186 8,247 8,173 7,518 7,531 7,524 7,518 7,512 7,353 7,349 7,344 7,352


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The graphs below present the annual investments in water and sanitation:

Graph 3: Investment - Block 3

3.3 Operating Costs

3.3.1 Operating Cost Assessment Premises

Significant operating expenses are human resources, electric power, chemical products

and sludge transport and disposal, in addition to others such as maintenance of civil works,

equipment and miscellaneous.

3.3.1.1 Chemicals

The following consumptions of chemicals were admitted, information received from

CEDAE, as summarized in the table below.

Table 15: Water and sewage chemicals

Chemicals - Water

Aluminum Sulfate 40 mg/L

Lime 20 mg/L

Chlorine 3 mg/L

Sludge polymer 5 kg/ton. sludge

Fluosilicic acid 1 mg/L

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Civil Works Systems Equipment


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Chemicals - Sewage

Chlorine 8 mg/L

Sludge polymer 5 kg/ton. sludge

3.3.1.2 Energy (kW)

The following unit tariffs were provided by Cedae, considering that the cost of demand

is included in consumption.

LV: 0.514448 R$/kWh (tariff class B3 - up to 2.3 kV)

MV: 0.425795 R$/kWh (tariff class A4 - 2.3 kV to 25 kV)

HV: 0.332477 R$/kWh (tariff class A3 - 69 kV to 138 kV)

The definition of the voltage class for each facility depends on a series of factors, such

as network availability in the area, concessionaire electric power standards, installed

capacity, among others, so that the following criteria were used to determine the energy

cost:

Low voltage: up to 150cv

Medium voltage: from 150 to 3,000 hp

High voltage: Greater than 3,000 hp

• Annual consumption: �� é� � 24ℎ � 365 ��

3.3.1.3 Human Resources

Operational Cost spreadsheets were prepared for the economic model of Concession of

sanitation services of CEDAE, except for the Producer System composed by the Guandu,

Lajes, Acari and Imunana-Laranjal Systems.

The average unit cost of labor is R$118,000.005/employee, regardless of position or type

of employment (own or outsourced), to be in force from year 1.

5 SNIS (Copasa and Sanepar)


Page27 of41

As far as productivity is concerned, a rate of 643 units6/employee was proposed, based

on the productivity of the Sanepar (Paraná) and Copasa (Minas Gerais) concessionaires, which

have a size compatible with CEDAE, regardless of position or employment link.

3.3.1.4 Sludge transport and disposal

The sludge generated in the WTPs and STPs will be transported to the nearest licensed

sanitary landfill. The average distance considered for transportation is 40 (forty) kilometers.

The estimated sludge production volume for the water and sewage treatment plant are

as follows:

• WTP sludge: ��³��

��

��.��

• Activated sludge with drying bed: 95 g/inhab.day;

• Centrifuge activated sludge: 127 g/inhab.day • UASB + Filter with drying bed: 27 g/inhab.day;

• UASB + Centrifuge filter: 40 g/inhab.day

• Lagoon: 20 g/inhab.day.

The unit cost of sludge transport and disposal are as follows:

• Transport cost: 3.50 R$/ton*km (EMOP base);

• Disposal cost: 68.00 R$/ton. (CEDAE basis)

3.3.1.5 Maintenance of Civil Works and Equipment

For the maintenance cost, the parameter of 68.50 R$/connection was used, based on

CEDAE's balance sheet.

3.3.1.6 Miscellaneous

The main costs considered as miscellaneous are: concession fees, rentals and machinery,

equipment and vehicles, real estate rentals, insurance costs, advertising and publicity,

communication and data transmission, advertisements and notices, laboratory services,

graphic services, bank fees, mobility (vehicles), materials (administrative and cleaning),

permits, licensing, etc.

The rate used is 54 R$/connection (CEDAE base).

3.3.1.7 Performance Guarantee Costs

6 SNIS


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There are performance guarantee costs that represent the costs associated with hiring

construction, operation insurances, System Works and System Operation, Maintenance and

Conservation Performance Guarantees.

A cost of 2.0% in relation to the value of the policy, calculated on the basis of practices

in similar contracts, was used to measure these values.

3.3.1.8 Water Purchase Costs

It is projected that in some municipalities, as specified above, the Concessionaire will

purchase treated water that will be produced by CEDAE, at a price of R$1.40/m³.

3.3.1.9 AGENERSA and INEA Fees

Expenses with the AGENERSA (Rio de Janeiro State Energy and Basic Sanitation

Regulatory Agency) and INEA (State Environment Institute) fees were projected, estimated

at 0.5% and 0.25% of revenues, net of PIS and Cofins taxes, respectively.

3.3.2 Cost Projection

The estimated annual operating cost figures are presented, with details of the main

items.

Table 16: Operating Cost

The graph below shows annual water and sewage costs:

Operating Cost (R$) 1 2 3 4 5 10 20 30 35

Treatment Materials 938,960 1,664,848 2,141,775 2,401,525 2,725,975 3,588,525 4,401,228 4,431,094 4,398,706

Power 12,038,109 13,226,107 14,863,921 15,853,565 17,069,483 16,733,814 19,435,488 19,559,346 19,310,797

Personnel 74,581,074 77,802,051 81,122,512 84,542,520 88,062,640 95,490,365 102,327,584 102,951,372 102,996,476

Maintenance 27,452,225 28,567,340 29,715,784 30,897,577 32,112,909 34,764,865 37,148,989 37,361,462 37,376,421

Other Operating Costs 16,319,289 17,867,058 19,475,973 21,146,096 22,877,760 25,964,644 29,786,828 30,104,869 30,107,810

AGENERSA and INEA 5,619,700 6,521,894 7,503,362 8,538,928 9,512,923 9,401,949 9,972,496 9,902,746 9,707,773

Water Purchase – CEDAE 289,239,767 289,920,189 290,286,085 290,322,430 290,014,656 265,035,103 265,367,812 261,356,521 256,431,345

Performance Guarantee (1,783,843) (1,783,843) (1,783,843) (1,783,843) (1,783,843) (995,786) (322,891) (104,779) (1,783,843)

Total 424,405,281 433,785,644 443,325,569 451,918,797 460,592,502 449,983,480 468,117,533 465,562,631 458,545,486


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Graph 4: Operating Cost - Block 3

3.4 Working Capital

The average payment and receipt terms adopted for the project were considered 30

days for costs and revenues as practiced in the water and sewage market.

3.5 Taxation

3.5.1 Tax Immunity

In September 2015, CEDAE filed a Civil Action before the Brazilian Supreme Court,

claiming recognition of the reciprocal tax immunity provided for in art. 150, item VI,

paragraph 'a' of the Federal Constitution, as well as the right to the refund of the amounts

paid by way of federal taxes in the five years preceding the action, and also of those paid

during the course of the action.

In 2017 the decision was challenged by appeals from the Federal Government and

CEDAE. CEDAE saved, since 2018, only on Corporate Income Tax and due to the change from

the non-cumulative regime to the cumulative regime of PIS/COFINS taxes, around R$ 476.7

million (R$ 165.9 million of Corporate Income Tax and R$ 310.8 million of PIS/COFINS taxes),

considering the amounts paid by the Company in 2017.

Finally, it is clarified that immunity has not been considered in this business plan since

a private contractor will not be entitled to such tax benefit.

3.5.2 Taxation on Revenue

The regulatory framework establishes that COFINS (Social Security Financing

Contribution), PIS (Social Integration Program) and ISS (Services Tax) taxes are levied on the

revenues of the Company or of the Specific Purpose Entity.

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Treatment Materials Power Personnel Maintenance Other Operating Costs AGENERSA and INEA Water Purchase – CEDAE Performance Guarantee


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According to Supplementary Law No. 7/1970, private legal entities are PIS taxpayers,

and the calculation of such contribution is based on the revenues earned in accordance with

Law No. 9718/98 and at different rates according to the revenue profile as provided for by

Law No. 10673/2002.

COFINS, likewise PIS, is currently governed by Law No. 9718/98, which establishes that

all legal entities and their equivalents in relation to income tax legislation are CONFINS

taxpayers, and its calculation is based on revenues and differentiated rates, in accordance

with the terms of the rule that regulates the tax.

In the case of these projects, the SPE is subject to the payment of PIS and COFINS at

the rates of 1.65% and 7.60% respectively, over its revenues.

The ISS, substitute of the ISSQN (Tax on Services of Any Nature), is a competence of the

municipalities and Federal District and is levied on the provision of services, having as

taxable event the list of services set out in Law No. 11.438/1997, and is governed by

Complementary Law 116/2003.

Environmental sanitation services, including purification, treatment, sewerage and

similar services, as well as water treatment and purification services are not subject to ISS,

as described in Message No. 362 of 31 July 2003, which explains the reasons for the Veto on

the application:

The application of the tax on environmental sanitation services, including

purification, treatment, sewerage and the like, as well as on water treatment

and purification services, does not serve the public interest. Taxation could

undermine the government's objective of universal access to such basic services.

The disincentive that taxation would bring to the sector would have as a long

term consequence an increase in expenses in serving the population affected by

the lack of access to basic sanitation and treated water. In addition, Bill no. 161

- Complementary expressly revoked art. 11 of Decree-Law no. 406, of December

31, 1968, as amended by Complementary Law no. 22, of December 9, 1974. Thus,

the hydraulic and civil construction works hired by the Federal, States, Federal

District, Municipalities Governments, independent agencies and

concessionaires, previously exempt from the tax, would be taxed, impacting the

Government expenses with investments.

Therefore, the taxation of these services does not serve public interest, and the

veto of items 7.14 and 7.15, included in the List of Services of this

Complementary Bill, is recommended. As a result, for reasons of legislative

technique, clauses X and XI of art. 3 of the Bill should also be vetoed.


Page31 of41

The Concessionaire is subject to payment of ISS on services not related to the activity

of water supply and sanitation.

Table 17: Taxation on Revenue

TAXATION ON REVENUE

Tax Rate (%)

ISS 0,00%

COFINS 7,60%

PIS 1,65%

3.5.3 Taxation on Profit

The SPE shall also pay tax over the Project Profit - Corporate Income Tax (IRPJ) and

Social Contribution on Net Profit (CSLL).

For the calculation of Corporate Income Tax, the economic-financial modeling used the

tax return in the Regime of Real Profit calculated annually, under the terms of the current

federal legislation, in compliance with art. 14 of Federal Law No. 9718/1998, which requires

legal entities whose total gross revenue, in the previous calendar year, is higher than R$

78.000,000.00 (seventy-eight million BRL), or R$ 6,500,000.00 (six million five hundred

thousand BRL), multiplied by the number of months of activity in the previous calendar year,

when less than 12 (twelve) months (limit established by Federal Law no. 10,637/2002) to

declare Income Tax on the basis of Real Profit.

On Income before tax (LAIR), Corporate Income Tax is levied at a rate of 15% when the

real profit portion is lower than the amount resulting from the multiplication of R$ 20,000.00

(twenty thousand BRL), by the number of months of the respective calculation period.

However, when the results of the SPE point to a value higher than this amount, the legislation

provides for an additional 10% to be charged on the excess value. However, due to the

divergences between real and nominal model projections, which make it impossible to

effectively absorb the benefits of differentiating rates according to the minimum level,

highlighted by the fact that this level represents little on the annual result of the project,

the choice was to mitigate possible inconsistencies by establishing the rate of 25% for

Corporate Income Tax.

The payment of Social Contribution on Net Profit-CSLL is regulated by Federal Law No.

7689/1988, which establishes it with the same rules for calculating Corporate Income Tax,

having its calculation basis defined in the provisions of Federal Law No. 10684/2003, which

determines the application of a rate of 9% on companies using the Real Profit tax return

system.


Page32 of41

Table 18: Taxation on Profit

TAXATION ON PROFIT

Tax Rate (%)

IR 25,00%

CSLL 9,00%

TOTAL 34,00%

3.6 Financing Structure

Since the projects have the potential to use Third Party Capital resources, it is necessary

to have a financial structure based mainly on loans that match the debt cash flow with the

Project cash flow, in order to provide an adequate debt service 7coverage ratio.

Thus, this item includes studies and considerations about the Bridge and Long-Term

Financing structure, in which disbursements with investments are financed.

The credit lines taken into account are those usually practiced by financial agents and

there is no commitment from these agents to guarantee this credit structure for the

concession.

3.6.1 Bridge Financing

The Bridge Financing (short-term loan) may be obtained from a private financial

institution that should provide the resources to cover part of the investment expenditure.

For the purposes of economic and financial modeling, we considered obtaining Bridge

Financing with a term of one year, with a grace period for amortization for the same period.

The amount foreseen for the bridge loan has been estimated at 70% of the value to be

invested in the first two years of the Concession. The interest on the short-term loan is

charged on the outstanding balance owed to the financial institution, and is established at

the CDI rate + 4%, an amount considered appropriate by the Economics Department of Banco

Fator in view of the practice by the banks offering short-term credit, and is paid monthly.

In addition, interest expenses included the payment of Structuring Charges and

Commissions in the amount of 0.5% of the amount raised, an amount considered appropriate

by the Economics Department of Banco Fator, for projects of this size, and the payment of

7 The Debt Service Coverage Ratio (DSCR) is calculated by dividing operating cash generation by debt service, based on information recorded in the Financial Statements, in a given period.


Page33 of41

IOF (Tax on Credit Operations, Foreign Exchange and Insurance) expenses on the amount

raised.

The repayment system considered for the short-term loan was the bullet, whose grace

period is equal to the term of the loan and settlement occurs via a single tranche, with the

first tranche of the long-term loan as funding.

3.6.2 Long Term Financing

The Long Term Financing represents the main instrument of funding of the SPE,

providing the financial leverage necessary for the bridge financing swap, thus allowing the

reduction of financial expenses of the Project, and is obtained from public or private

financial institutions.

It was considered obtaining a Long Term Financing from a private institution in the

Project Finance modality, with a term of 12 years (as from the start of the financing - second

year of Concession).

Together with the financial institution, the Concessionaire shall raise the amount

equivalent to 70% of the investments. For the preliminary analysis, the leverage of the

investments of the first two years of concession was considered.

The interest on the long term loan is charged on the outstanding balance with the

financial institution, and is established at the IPCA rate + 9%, as practiced in the capital

market for incentive papers (incentive debentures) with similar risk, according to the

Economics Department of Banco Fator, and its payment occurs monthly.

In addition, interest expenses included the payment of Structuring Charges and

Commissions in the amount of 0.5% of the amount raised, and the payment of IOF (Tax on

Credit Operations, Foreign Exchange and Insurance) expenses on the amount raised. The

amortization system used in the financial modeling of the long-term loan was the SAC

(Constant Amortization System).

The releveraging aims at exactly aligning the projection with the premise of a capital

structure stipulated in 60% of equity and 40% of debt. The premise of raising funds from third

parties with public banks (25% with BNDES and 25% with CEF) and market issues (50%) reflects

a trend already evidenced by private companies in the sector of sanitation of diversification

of their debt sources.

3.6.3 Covenants

The following covenants were considered for the projected financing:

(i) DSCR (Debt Service Coverage Ratio): is characterized by the ability to pay the

Concession debt and is calculated through the generation of operating cash net


Page34 of41

of taxes divided by the debt service of the company (installments to be

amortized for a given period). The benchmark used is that the DSCR could not

be less than 1.3;

(ii) NE / Asset: is determined by dividing Net Equity by Assets. The benchmark used

was that the percentage shall not be lower than 20%;

(iii) Net Debt / EBITDA: estimated by dividing net debt (calculated by subtracting

gross debt from cash and cash equivalents) by EBITDA (earning before interest

taxes depreciation and amortization). The benchmark used is that net debt

should be not greater than three times the EBITDA.

3.6.4 Tax Shield

Considering that the Concessionaire's financial expenses are deductible from the

Corporate Income Tax and Social Contribution on Net Profit tax bases, the addition of

leverage to the Project reduces the expense with Income Tax, generating benefits for the

Project.

In the finance, we call this tax benefit Tax Shield, which is calculated as the difference

between the Tax on Not Leveraged Project Result (Project) and the Tax on Leveraged Project

Result (Leveraged).

The Tax Shield was incorporated into the Project in the preparation of the Financial

Statements (Income Statement, Leveraged Cash Flow and Balance Sheet) in order to

incorporate the tax benefits of interest expenses into the project, matching the Tax on Not

Leveraged Project Result (Project) with the Tax on Leveraged Project Result (Leveraged)e,

thus reflecting all aspects arising from the leverage of the Project.


Page35 of41

4. ATTACHMENTS


Page36 of41

4 ATTACHMENTS

4.1 Active Water Units Projections

Economias Ativas - Água 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Angra dos Reis 70,210 73,374 76,595 79,873 83,208 86,601 89,550 92,544 95,583 98,667 100,645 101,965 103,286 104,606 105,926 107,246 107,964 108,682

Engenheiro Paulo de Frontin 2,140 2,698 3,279 3,885 4,515 4,615 4,708 4,801 4,893 4,986 5,079 5,145 5,211 5,277 5,342 5,408 5,482 5,555

Itaguai 37,046 40,161 43,382 46,710 50,144 51,274 52,128 52,981 53,834 54,687 55,541 56,075 56,610 57,145 57,680 58,215 58,463 58,711

Mangaratiba 13,372 14,097 14,841 15,603 16,384 17,184 17,893 18,617 19,355 20,107 20,874 21,514 21,771 22,027 22,284 22,541 22,670 22,800

Paracambi 12,416 14,000 15,635 17,322 19,060 19,403 19,656 19,909 20,162 20,416 20,669 20,826 20,983 21,140 21,297 21,454 21,548 21,641

Pirai 7,818 8,122 8,424 8,730 9,040 9,353 9,663 9,977 10,295 10,616 10,940 11,293 11,490 11,688 11,885 12,082 12,262 12,443

Rio Claro 3,889 4,575 5,288 6,027 6,793 6,933 7,041 7,149 7,257 7,365 7,473 7,549 7,624 7,700 7,775 7,850 7,897 7,944

Rio de Janeiro - Bloco III 422,736 430,023 437,362 444,752 452,195 459,689 465,679 471,705 477,768 481,520 485,272 487,451 489,630 491,809 493,988 496,167 497,036 497,905

Seropedica 18,700 21,798 25,037 28,418 31,942 32,757 33,386 34,016 34,645 35,275 35,904 36,313 36,721 37,129 37,537 37,945 38,161 38,378

Total 588,327 608,848 629,843 651,320 673,281 687,809 699,704 711,699 723,792 733,639 742,397 748,131 753,326 758,521 763,714 768,908 771,483 774,059

Economias Ativas - Água 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

Angra dos Reis 109,400 110,117 110,835 111,074 111,312 111,550 111,789 112,027 111,904 111,782 111,659 111,536 111,413 111,026 110,638 110,250 109,862

Engenheiro Paulo de Frontin 5,629 5,702 5,776 5,821 5,867 5,913 5,959 6,004 6,036 6,068 6,100 6,132 6,164 6,183 6,203 6,222 6,242

Itaguai 58,959 59,208 59,456 59,472 59,487 59,503 59,519 59,535 59,371 59,206 59,042 58,878 58,714 58,419 58,123 57,828 57,532

Mangaratiba 22,929 23,059 23,188 23,218 23,248 23,278 23,308 23,338 23,295 23,252 23,209 23,166 23,123 23,028 22,933 22,838 22,743

Paracambi 21,735 21,829 21,923 21,948 21,974 22,000 22,026 22,051 22,025 21,999 21,973 21,947 21,920 21,852 21,783 21,715 21,646

Pirai 12,623 12,803 12,983 13,098 13,214 13,329 13,444 13,559 13,629 13,698 13,767 13,837 13,906 13,936 13,965 13,995 14,025

Rio Claro 7,991 8,038 8,085 8,109 8,133 8,156 8,180 8,204 8,209 8,213 8,218 8,223 8,228 8,217 8,206 8,196 8,185

Rio de Janeiro - Bloco III 498,773 499,642 500,511 500,312 500,113 499,914 499,714 499,515 498,418 497,320 496,223 495,126 494,028 492,197 490,366 488,534 486,703

Seropedica 38,594 38,810 39,027 39,091 39,156 39,221 39,286 39,351 39,298 39,244 39,191 39,137 39,084 38,940 38,796 38,652 38,508

Total 776,633 779,208 781,784 782,143 782,504 782,864 783,225 783,584 782,185 780,782 779,382 777,982 776,580 773,798 771,013 768,230 765,446


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4.2 Active Sewage Units Projections

Economias Ativas - Esgoto 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Angra dos Reis 1,848 5,629 9,641 13,884 18,357 23,061 27,842 32,807 37,953 43,282 48,794 54,139 59,606 65,195 70,905 76,736 82,230 87,789

Engenheiro Paulo de Frontin - 948 1,942 2,980 4,063 4,153 4,237 4,320 4,404 4,488 4,572 4,631 4,690 4,749 4,808 4,867 4,934 5,000

Itaguai 2,281 12,273 22,745 33,697 45,130 46,147 46,915 47,683 48,451 49,219 49,987 50,468 50,949 51,431 51,912 52,394 52,617 52,840

Mangaratiba - 814 1,678 2,590 3,552 4,563 5,588 6,652 7,753 8,892 10,069 11,210 12,375 13,564 14,778 16,016 17,182 18,360

Paracambi 6,066 8,695 11,419 14,239 17,154 17,463 17,691 17,918 18,146 18,374 18,602 18,743 18,884 19,026 19,167 19,308 19,393 19,477

Pirai 3,634 4,794 6,014 7,295 8,637 8,867 9,091 9,315 9,539 9,762 9,986 10,164 10,341 10,519 10,696 10,874 11,036 11,198

Rio Claro - 1,434 2,931 4,491 6,114 6,240 6,337 6,434 6,532 6,629 6,726 6,794 6,862 6,930 6,997 7,065 7,108 7,150

Rio de Janeiro - Bloco III - - - - - - - - - - - - - - - - - -

Seropedica 10,842 14,999 19,369 23,952 28,747 29,481 30,048 30,614 31,181 31,747 32,314 32,681 33,049 33,416 33,783 34,151 34,345 34,540

Total 24,671 49,586 75,739 103,128 131,754 139,975 147,749 155,743 163,959 172,393 181,050 188,830 196,756 204,830 213,046 221,411 228,845 236,354

Economias Ativas - Esgoto 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

Angra dos Reis 93,415 99,106 99,752 99,966 100,181 100,395 100,610 100,824 100,714 100,603 100,493 100,383 100,272 99,923 99,574 99,225 98,876


Itaguai 53,064 53,287 53,510 53,524 53,539 53,553 53,567 53,581 53,434 53,286 53,138 52,990 52,843 52,577 52,311 52,045 51,779

Mangaratiba 19,550 20,753 20,869 20,896 20,923 20,950 20,977 21,005 20,966 20,927 20,888 20,850 20,811 20,725 20,640 20,554 20,469

Paracambi 19,562 19,646 19,730 19,753 19,777 19,800 19,823 19,846 19,823 19,799 19,776 19,752 19,728 19,667 19,605 19,543 19,482

Pirai 11,360 11,523 11,685 11,789 11,892 11,996 12,100 12,203 12,266 12,328 12,391 12,453 12,516 12,542 12,569 12,595 12,622

Rio Claro 7,192 7,234 7,277 7,298 7,319 7,341 7,362 7,383 7,388 7,392 7,396 7,401 7,405 7,395 7,386 7,376 7,367

Rio de Janeiro - Bloco III - - - - - - - - - - - - - - - - -

Seropedica 34,735 34,929 35,124 35,182 35,241 35,299 35,358 35,416 35,368 35,320 35,272 35,223 35,175 35,046 34,916 34,787 34,658

Total 243,944 251,610 253,145 253,647 254,152 254,656 255,160 255,662 255,392 255,116 254,844 254,571 254,297 253,440 252,584 251,725 250,871


Page38 of41

4.3 Water Revenue Projection

Receita - Água (R$ mil) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Angra dos Reis 51,649 55,441 59,326 63,298 67,356 71,495 72,481 73,443 74,908 76,370 77,550 78,365 79,161 79,968 80,776 81,585 82,030 82,474

Engenheiro Paulo de Frontin 2,433 2,898 3,323 3,703 4,040 3,865 3,675 3,481 3,306 3,124 3,170 3,203 3,235 3,268 3,301 3,333 3,374 3,415

Itaguai 39,357 48,892 58,935 69,420 80,277 87,329 85,257 83,136 81,032 78,873 79,604 80,006 80,407 80,809 81,212 81,614 81,729 81,845

Mangaratiba 11,572 13,236 14,799 16,235 17,514 18,608 17,833 16,960 15,954 14,848 15,346 15,768 15,910 16,052 16,194 16,336 16,402 16,469

Paracambi 8,488 11,022 13,780 16,734 19,860 21,524 20,933 20,337 19,845 19,341 19,493 19,588 19,683 19,778 19,873 19,968 20,027 20,086

Pirai 8,613 8,709 8,774 8,813 8,826 8,811 8,544 8,261 8,015 7,749 7,934 8,143 8,239 8,336 8,433 8,529 8,620 8,710

Rio Claro 3,850 4,309 4,732 5,115 5,456 5,260 5,014 4,765 4,545 4,321 4,365 4,398 4,431 4,465 4,498 4,531 4,552 4,574


Seropedica 28,759 43,277 59,190 76,071 93,459 101,994 95,838 89,537 83,311 76,909 77,825 78,383 78,942 79,501 80,060 80,619 80,877 81,135

Total 692,798 772,587 853,972 936,354 1,019,095 1,085,985 1,072,386 1,058,221 1,040,044 1,021,388 1,015,761 1,019,919 1,023,665 1,027,423 1,031,182 1,034,940 1,036,344 1,037,749

Receita - Água (R$ mil) 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

Angra dos Reis 82,919 83,365 83,809 83,946 84,083 84,220 84,357 84,494 84,373 84,252 84,131 84,009 83,888 83,583 83,277 82,972 82,667


Itaguai 81,961 82,077 82,193 82,074 81,954 81,835 81,716 81,597 81,290 80,982 80,674 80,367 80,059 79,608 79,158 78,708 78,258

Mangaratiba 16,535 16,602 16,668 16,675 16,681 16,687 16,694 16,700 16,660 16,621 16,581 16,541 16,502 16,430 16,357 16,284 16,212

Paracambi 20,145 20,203 20,262 20,271 20,280 20,289 20,298 20,307 20,275 20,243 20,212 20,180 20,148 20,082 20,015 19,948 19,881

Pirai 8,801 8,891 8,982 9,036 9,089 9,143 9,197 9,251 9,281 9,310 9,340 9,369 9,399 9,407 9,416 9,423 9,431

Rio Claro 4,595 4,617 4,638 4,649 4,660 4,671 4,682 4,692 4,694 4,695 4,697 4,698 4,699 4,692 4,685 4,679 4,672


Seropedica 81,393 81,651 81,910 81,927 81,945 81,963 81,981 81,998 81,819 81,640 81,460 81,281 81,102 80,766 80,429 80,093 79,756

Total 1,039,153 1,040,557 1,041,962 1,041,251 1,040,540 1,039,828 1,039,118 1,038,407 1,035,851 1,033,294 1,030,739 1,028,182 1,025,626 1,021,548 1,017,468 1,013,389 1,009,310


Page39 of41

4.4 Sewage Revenue Projection

Receita - Esgoto (R$ mil) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Angra dos Reis 1,492 4,197 6,932 9,702 12,503 15,331 18,121 20,914 23,875 26,874 30,141 33,341 36,600 39,918 43,295 46,731 50,005 53,312

Engenheiro Paulo de Frontin - 1,016 1,957 2,819 3,598 3,434 3,265 3,093 2,937 2,775 2,816 2,846 2,874 2,904 2,933 2,962 2,998 3,034

Itaguai 2,418 14,426 29,970 48,743 63,904 62,721 61,234 59,711 58,201 56,652 57,178 57,467 57,757 58,046 58,336 58,625 58,708 58,792

Mangaratiba - 744 1,633 2,614 3,329 3,952 4,456 4,848 5,112 5,253 5,922 6,573 7,235 7,908 8,591 9,286 9,945 10,609

Paracambi 4,147 6,618 9,777 13,413 15,882 15,498 15,072 14,642 14,288 13,926 14,035 14,103 14,172 14,240 14,309 14,377 14,419 14,462

Pirai 3,922 4,893 5,799 6,638 7,404 7,149 6,878 6,599 6,353 6,096 6,194 6,268 6,341 6,415 6,489 6,563 6,632 6,702

Rio Claro - 1,247 2,402 3,465 4,432 4,241 4,040 3,837 3,659 3,476 3,510 3,536 3,562 3,588 3,614 3,640 3,657 3,675

Rio de Janeiro - Bloco III - - - - - - - - - - - - - - - - - -

Seropedica 16,673 28,145 43,819 61,843 77,417 73,436 69,004 64,466 59,984 55,375 56,034 56,436 56,839 57,241 57,643 58,046 58,231 58,418

Total 28,652 61,285 102,291 149,237 188,468 185,761 182,070 178,112 174,410 170,427 175,830 180,569 185,379 190,260 195,209 200,229 204,596 209,003

Receita - Esgoto (R$ mil) 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

Angra dos Reis 56,651 60,022 60,343 60,441 60,540 60,638 60,737 60,835 60,748 60,661 60,574 60,487 60,399 60,180 59,960 59,740 59,520


Itaguai 58,875 58,959 59,042 58,956 58,871 58,785 58,699 58,614 58,392 58,170 57,949 57,727 57,506 57,182 56,857 56,533 56,209

Mangaratiba 11,279 11,953 12,001 12,006 12,010 12,015 12,019 12,024 11,995 11,967 11,938 11,910 11,881 11,829 11,777 11,725 11,672

Paracambi 14,504 14,546 14,589 14,595 14,602 14,608 14,615 14,621 14,598 14,575 14,553 14,530 14,507 14,459 14,411 14,363 14,314

Pirai 6,771 6,840 6,910 6,951 6,992 7,034 7,075 7,116 7,139 7,161 7,184 7,207 7,229 7,235 7,242 7,248 7,254

Rio Claro 3,692 3,709 3,727 3,736 3,745 3,754 3,763 3,772 3,773 3,775 3,777 3,778 3,780 3,775 3,771 3,765 3,761

Rio de Janeiro - Bloco III - - - - - - - - - - - - - - - - -

Seropedica 58,603 58,789 58,975 58,987 59,001 59,013 59,026 59,039 58,910 58,781 58,651 58,522 58,393 58,151 57,909 57,667 57,424

Total 213,445 217,927 218,730 218,839 218,949 219,058 219,168 219,278 218,829 218,380 217,932 217,483 217,034 216,160 215,285 214,409 213,535


Page40 of41

4.5 Default Projection

Inadimplência (%) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Angra dos Reis 27% 26% 24% 23% 22% 21% 20% 18% 17% 16% 15% 14% 12% 11% 10% 10% 10% 10%

Engenheiro Paulo de Frontin 27% 25% 24% 23% 22% 21% 19% 18% 17% 16% 15% 14% 12% 11% 10% 10% 10% 10%

Itaguai 39% 36% 34% 32% 30% 28% 26% 24% 22% 20% 18% 16% 14% 12% 10% 10% 10% 10%

Mangaratiba 37% 35% 33% 31% 29% 27% 25% 24% 22% 20% 18% 16% 14% 12% 10% 10% 10% 10%

Paracambi 23% 22% 21% 20% 19% 18% 17% 16% 15% 14% 14% 13% 12% 11% 10% 10% 10% 10%

Pirai 24% 23% 22% 21% 20% 19% 18% 17% 16% 15% 14% 13% 12% 11% 10% 10% 10% 10%

Rio Claro 33% 31% 29% 28% 26% 24% 23% 21% 20% 18% 16% 15% 13% 12% 10% 10% 10% 10%

Rio de Janeiro - Bloco III 75% 71% 66% 61% 57% 52% 47% 43% 38% 33% 29% 24% 19% 15% 10% 10% 10% 10%

Seropedica 58% 55% 52% 48% 45% 41% 38% 34% 31% 27% 24% 20% 17% 13% 10% 10% 10% 10%

Inadimplência (%) 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

Angra dos Reis 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10%

Engenheiro Paulo de Frontin 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10%

Itaguai 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10%

Mangaratiba 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10%

Paracambi 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10%

Pirai 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10%

Rio Claro 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10%

Rio de Janeiro - Bloco III 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10%

Seropedica 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10%


Page41 of41

4.6 Water and Sanitation Investment Projection

Investimento (R$ mil) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Angra dos Reis 14,165 37,170 40,366 46,571 42,059 39,436 29,683 36,753 37,288 35,873 28,734 30,104 29,737 28,150 25,855 23,659 21,106 20,508

Engenheiro Paulo de Frontin 4,076 13,202 14,062 12,951 13,011 2,490 1,016 1,204 1,203 1,206 1,291 1,196 1,050 1,020 1,023 833 943 941

Itaguai 12,296 105,755 110,657 109,072 93,269 17,397 13,036 10,892 10,295 9,561 9,458 6,830 6,839 6,848 6,857 6,754 4,370 4,382

Mangaratiba 8,100 15,433 15,200 14,507 14,808 15,005 12,355 15,412 15,910 18,712 16,676 16,405 14,182 14,832 14,492 10,328 8,781 8,776

Paracambi 3,311 21,232 21,575 26,485 30,548 13,819 7,018 3,464 2,652 2,212 2,110 1,790 1,795 1,867 1,804 1,702 1,522 1,524

Pirai 4,074 19,420 22,123 20,396 18,518 5,103 4,232 3,896 3,928 3,878 3,934 3,995 2,944 2,944 2,949 2,967 2,808 2,791

Rio Claro 6,616 16,738 17,274 11,482 11,864 2,104 1,620 1,283 1,286 1,174 1,122 999 1,002 1,001 1,004 952 849 849


Seropedica 11,628 84,934 82,091 81,868 76,839 14,160 9,051 8,703 10,086 11,062 9,287 5,037 5,050 5,064 5,077 4,875 3,472 3,556

Total 82,436 339,878 356,642 391,256 394,877 204,084 142,474 123,246 120,989 104,296 93,572 77,987 74,235 73,369 70,582 63,932 52,760 52,240

Investimento (R$ mil) 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

Angra dos Reis 20,087 19,682 14,573 5,263 5,267 5,270 5,271 5,319 4,672 4,675 4,679 4,680 4,728 4,597 4,601 4,604 4,608

Engenheiro Paulo de Frontin 949 946 896 909 905 908 893 840 733 735 741 741 686 674 676 677 685

Itaguai 4,391 4,396 4,297 2,368 2,373 2,385 2,390 2,288 2,231 2,240 2,249 2,257 2,154 2,231 2,240 2,248 2,257

Mangaratiba 8,407 8,432 6,170 1,392 1,358 1,370 1,370 1,408 1,034 1,006 1,009 1,011 1,052 1,034 1,006 1,009 1,011

Paracambi 1,529 1,536 1,431 1,225 1,230 1,231 1,310 1,137 1,111 1,116 1,120 1,125 1,023 1,111 1,116 1,120 1,125

Pirai 2,789 2,789 2,821 2,214 2,200 2,204 2,199 2,227 1,791 1,784 1,778 1,779 1,800 1,430 1,410 1,408 1,412

Rio Claro 855 852 803 717 726 726 729 671 615 621 621 623 568 576 579 582 584


Seropedica 3,499 3,512 3,313 2,227 2,243 2,254 2,270 2,068 1,693 1,706 1,720 1,733 1,531 1,693 1,706 1,720 1,733

Total 51,423 50,942 41,660 23,385 23,378 23,430 23,390 23,258 20,948 20,958 20,996 20,908 20,843 20,416 20,409 20,448 20,374

project for regionalized concession of water …€¦ · rh i - baia da ilha grande rio cantagalo...

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