Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS): Análisis PESTLE [Actualizado en Ene-2025]

En el corazón de la región económica más dinámica de Brasil, Sabesp se erige como un titán de infraestructura crítica, gestionando los servicios de agua y saneamiento para 28.5 millones personas de todo 375 municipios. Esta empresa estatal navega por un paisaje complejo de desafíos políticos, económicos y ambientales, transformando la gestión del agua a través de tecnologías de vanguardia y prácticas sostenibles. Sumérgete en nuestro análisis integral de mano para descubrir la intrincada dinámica que dan forma a las operaciones estratégicas de Sabesp y su papel fundamental en el ecosistema urbano de São Paulo.

Companhia de SaneAmento Básico do Estado de São Paulo - Sabesp (SBS) - Análisis de mortero: Factores políticos

Estructura empresarial estatal

SABESP es el 50.3% propiedad del gobierno estatal de São Paulo, con el 36.6% de las acciones negociadas en la bolsa de valores B3 y NYSE. La compañía opera bajo el control del gobierno estatal directo con una influencia política significativa.

Desglose de propiedad	Porcentaje
Gobierno del Estado de São Paulo	50.3%
Flotación pública (B3 y NYSE)	36.6%
Otros accionistas	13.1%

Entorno regulatorio

SABESP opera bajo múltiples marcos regulatorios:

• Derecho básico de Saneamiento Nacional (Ley 11,445/2007)
• Nuevo marco legal de saneamiento (Ley 14,026/2020)
• Mecanismos regulatorios a nivel estatal

Vulnerabilidades de inversión política

Los cambios políticos impactan directamente las prioridades de inversión de infraestructura. Las vulnerabilidades clave incluyen:

• Riesgos de asignación de presupuesto
• Cambios en la infraestructura del ciclo político
• Prioridades de inversión gubernamental

Métricas de inversión política	Valor 2023
Presupuesto de inversión de infraestructura	R $ 1.2 mil millones
Objetivo de expansión de saneamiento del gobierno	90% de cobertura de agua
Objetivo de tratamiento de aguas residuales	85% para 2033

Mecanismos de responsabilidad de gobierno

SABESP está sujeto a múltiples marcos de responsabilidad:

• Supervisión del gobierno estatal
• Requisitos de transparencia pública
• Legislación de responsabilidad fiscal

Métricas de gobernanza	Nivel de cumplimiento
Índice de transparencia pública	8.7/10
Informes públicos anuales	100% cumplido
Cumplimiento de auditoría externa	Cumplimiento total

Companhia de SaneAmento Básico do Estado de São Paulo - Sabesp (SBS) - Análisis de mortero: Factores económicos

Opera en la región económica más grande de Brasil con flujos de ingresos estables

Sabesp opera principalmente en el estado de São Paulo, que representa el 32.2% del PIB de Brasil. La compañía atiende a 375 municipios, con una cobertura de población total de aproximadamente 28.1 millones de personas.

Métrica financiera	Valor 2022	Valor 2023
Ingresos operativos netos	R $ 14.8 mil millones	R $ 16.2 mil millones
Ebitda	R $ 5.6 mil millones	R $ 6.1 mil millones
Lngresos netos	R $ 2.3 mil millones	R $ 2.7 mil millones

Dependiendo de las asignaciones de presupuesto estatal y la inversión en infraestructura

Sabesp se basa en inversiones estatales de infraestructura, con R $ 1.2 mil millones asignados para mejoras de infraestructura en 2023. El apoyo del gobierno estatal representa aproximadamente el 18% del capital de inversión total.

Expuesto a fluctuaciones económicas brasileñas y volatilidad monetaria

Indicadores económicos brasileños que afectan a Sabesp:

• Tasa de inflación (2023): 4.62%
• Tipo de cambio real a USD brasileño: 1 USD = R $ 4.93
• Tasa de interés base del banco central brasileño: 11.25%

Genera ingresos a través de disposiciones de servicios de agua y aguas residuales

Categoría de servicio	2022 Ingresos	2023 ingresos
Suministro de agua	R $ 8.9 mil millones	R $ 9.7 mil millones
Servicios de alcantarillado	R $ 5.9 mil millones	R $ 6.5 mil millones
Ingresos totales del servicio	R $ 14.8 mil millones	R $ 16.2 mil millones

Cobertura de servicio de agua y aguas residuales: 98.7% de suministro de agua, 92.4% de recolección de aguas residuales en municipios con servicios.

Companhia de SaneAmento Básico do Estado de São Paulo - Sabesp (SBS) - Análisis de mortero: Factores sociales

Proveedor de infraestructura crítica

Sabesp opera en 375 municipios en todo el estado de São Paulo, que brinda servicios esenciales de agua y saneamiento.

Cobertura de servicio	Municipios totales	Población atendida
Suministro de agua	375	28.5 millones
Tratamiento de aguas residuales	366	25.1 millones

Demografía de la población

Sabesp sirve a una población urbana diversa con variaciones socioeconómicas significativas.

Área urbana	Densidad de población	Tarifa de cobertura de servicio
Metropolitano São Paulo	2.500 habitantes/km²	99.1%
Regiones interiores	150-300 habitantes/km²	95.7%

Gestión sostenible del agua

La demanda pública de gestión sostenible del agua ha aumentado significativamente, impulsado por la conciencia ambiental y la escasez de recursos.

Métricas de conservación del agua	2023 rendimiento
Reducción de la pérdida de agua	14.2%
Tasa de tratamiento de aguas residuales	87.3%

Condiciones de vida urbana y salud pública

Las inversiones de infraestructura de SABESP afectan directamente los niveles de vida urbanos y la salud de la comunidad.

Indicadores de impacto de la salud	Estadísticas anuales
Waterborne Disease Reduction	62% de disminución
Inversión en infraestructura de saneamiento	R $ 1.2 mil millones

Companhia de SaneAmento Básico do Estado de São Paulo - Sabesp (SBS) - Análisis de mortero: factores tecnológicos

Implementación de tecnologías avanzadas de tratamiento de agua y monitoreo

SABESP ha invertido R $ 412.5 millones en tecnologías avanzadas de tratamiento de agua en 2023. La compañía opera 119 plantas de tratamiento de agua en todo el estado de São Paulo, utilizando filtración de membrana y sistemas de desinfección UV.

Tipo de tecnología	Número de instalaciones	Inversión (r $)
Sistemas de filtración de membrana	42	187.6 millones
Sistemas de desinfección UV	77	224.9 millones

Invertir en transformación digital y sistemas inteligentes de gestión del agua

SABESP asignó R $ 285.3 millones para iniciativas de transformación digital en 2023, implementando sensores IoT y plataformas de monitoreo en tiempo real.

Tecnología digital	Cobertura	Inversión (r $)
Sensores de calidad del agua de IoT	3,647 km de red	126.7 millones
Sistemas de medición inteligentes	1,2 millones de medidores conectados	158.6 millones

Desarrollo de tecnologías de detección de fugas y conservación del agua

SABESP redujo las pérdidas de agua en un 14.5% a través de tecnologías avanzadas de detección de fugas, invirtiendo R $ 176.8 millones en 2023.

Tecnología de detección de fugas	Reducción de la pérdida de agua	Inversión (r $)
Redes de sensores acústicos	8.3%	92.4 millones
Sistemas de mantenimiento predictivo	6.2%	84.4 millones

Utilización de GIS y análisis de datos para la gestión de infraestructura

SABESP implementó plataformas integrales de análisis de datos y análisis de datos que cubren el 99.2% de su infraestructura operativa, con una inversión de R $ 214.6 millones en 2023.

Plataforma de análisis de datos	Cobertura de infraestructura	Inversión (r $)
Sistemas de mapeo geoespacial	99.2%	124.7 millones
Análisis de infraestructura predictiva	87.5%	89.9 millones

Companhia de SaneAmento Básico do Estado de São Paulo - Sabesp (SBS) - Análisis de mortero: Factores legales

Forzado por el marco nacional de saneamiento y el cumplimiento regulatorio

Sabesp opera debajo Ley No. 14.026/2020, El nuevo marco legal para el saneamiento básico en Brasil. La compañía tiene el mandato legal de cumplir con los estándares regulatorios nacionales establecidos por Agência Nacional de Águas E SaneAmento Básico (ANA).

Marco regulatorio	Requisitos legales clave	Estado de cumplimiento
Ley Nacional de Saneamiento	Cobertura universal de agua y aguas residuales	Implementación continua
Gestión de recursos hídricos	Uso de agua sostenible	Protocolos de monitoreo estrictos
Protección ambiental	Normas de tratamiento de aguas residuales	Tasa de cumplimiento del 98.3%

Sujeto a la protección del medio ambiente y las leyes de gestión de recursos hídricos

Sabesp debe adherirse a Política ambiental nacional (Ley 6.938/1981) y Política nacional de recursos hídricos (Ley 9.433/1997). Se requiere que la Compañía obtenga y mantenga licencias ambientales para todas las actividades operativas.

Regulación ambiental	Requisito específico	Métrica de cumplimiento de SABESP
Licencia ambiental	Permisos ambientales operativos	100% de licencias actuales
Gestión de recursos hídricos	Cuotas de extracción de agua	Dentro del 95% de los límites asignados

Requerido para cumplir con los estrictos estándares de entrega de servicios y servicios

Sabesp debe cumplir con Decreto de estándares de calidad 5.440/2005, que exige informes transparentes de la calidad del agua y métricas de prestación de servicios.

• Frecuencia de monitoreo de calidad del agua: diariamente
• Eficiencia mínima del tratamiento del agua: 99.5%
• Cobertura de recolección de aguas residuales en São Paulo: 87.4%

Vulnerable a posibles desafíos legales y cambios regulatorios

La Compañía enfrenta riesgos legales potenciales de incumplimiento ambiental, fallas de prestación de servicios y paisajes regulatorios en evolución.

Categoría de riesgo legal	Impacto potencial	Estrategia de mitigación
Litigio ambiental	Posibles multas de hasta R $ 50 millones	Programas de cumplimiento proactivo
Incumplimiento regulatorio	Restricciones de operación de servicio	Monitoreo legal y regulatorio continuo

Companhia de SaneAmento Básico do Estado de São Paulo - Sabesp (SBS) - Análisis de mortero: Factores ambientales

Comprometido con la gestión sostenible de recursos hídricos

Sabesp administra 375 instalaciones de tratamiento de agua en todo el estado de São Paulo. La compañía trata 67.5 millones de metros cúbicos de agua diariamente y atiende a 27.7 millones de personas.

Métrica de gestión del agua	Datos cuantitativos
Instalaciones totales de tratamiento de agua	375
Volumen diario del tratamiento del agua	67.5 millones m³
Población atendida	27.7 millones de personas

Implementación de programas de conservación y reciclaje del agua

Sabesp invirtió R $ 412.5 millones en iniciativas de conservación del agua en 2023. La tasa de reciclaje de agua de la compañía alcanzó el 22.3% de la producción total de agua.

Métrica del programa de conservación	Valor
Inversión en conservación	R $ 412.5 millones
Tasa de reciclaje de agua	22.3%

Abordar los impactos del cambio climático en la infraestructura de agua

Sabesp ha implementado Actualizaciones de infraestructura de resiliencia climática En 42 municipios, con una inversión de R $ 689 millones específicamente dirigidas a estrategias de adaptación climática.

Métrica de adaptación climática	Datos cuantitativos
Municipios con actualizaciones de resiliencia climática	42
Inversión en adaptación climática	R $ 689 millones

Reducción de la huella ambiental y la preservación ecológica

SABESP redujo las emisiones de carbono en un 18,7% en 2023, con una reducción total de gases de efecto invernadero de 124,500 toneladas métricas de CO2 equivalente.

Métrica de huella ambiental	Valor
Reducción de emisiones de carbono	18.7%
Reducción equivalente total de CO2	124,500 toneladas métricas

Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS) - PESTLE Analysis: Social factors

Public acceptance of privatization and potential tariff restructuring is a risk

The social contract underpinning Companhia de Saneamento Básico do Estado de São Paulo - SABESP's operations shifted dramatically with the privatization completed in July 2024. For the public, privatization is a double-edged sword: they expect private-sector efficiency but fear price gouging. To manage this perception, the initial tariff restructuring was a key social concession, including an immediate reduction of -10% for the social tariff, -1% for residential customers, and -0.5% for other categories.

But that initial goodwill is now being tested. SABESP faces its first post-privatization tariff review in late 2025, setting the stage for 2026 rates. Goldman Sachs projects a base-case tariff increase of 12%, with potential hikes ranging from 3% to 17%, depending on how the regulator (ARSESP) validates the company's Regulatory Asset Base (RAB), which is projected at R$87 billion in 2025. This is the near-term risk: a significant rate increase, even if financially justified, could erode public trust and trigger political backlash against the privatization model. The existence of the FAUSP (Tariff Stabilization Fund) is the defintely a necessary buffer here.

Here's the quick math on the social tariff cushion:

• Initial Social Tariff Reduction: -10% (July 2024).
• FAUSP Allocation (9M25): Around R$1 billion allocated to the fund.
• Beneficiaries (3Q25): 1.8 million people benefit from subsidized rates.

High demand for universal service expansion, especially in peripheral areas

The core social mandate for SABESP remains achieving universalization (99% water access and 90% sewage collection/treatment) for the 375 municipalities it serves. The privatization deal accelerated the national target from 2033 to 2029, creating immense pressure to deliver service expansion quickly, particularly in peripheral and low-income areas that lack formal infrastructure.

The company is responding with a massive capital expenditure (CAPEX) plan. The total investment planned for the 2024-2029 period is approximately R$70 billion. In the first quarter of 2025 alone, SABESP invested R$2.9 billion, which is double the pace of the prior year. This investment is directly linked to social outcomes, adding 130,000 new connections in Q1 2025 and driving the expansion of the physical network.

The near-term expansion targets for 2025 are concrete and ambitious:

Service Expansion Target (2025)	Amount
Planned Water Distribution Network Extension	1,500 km
Planned Sewage Collection Network Extension	2,000 km
Total People Served (Water, latest data)	28.1 million
Total People Served (Sewage, latest data)	24.9 million

Water scarcity and rationing concerns drive public perception and service quality demands

Water security is a constant social and operational challenge in São Paulo, directly influencing public perception of SABESP's service quality. In September 2025, the state's main reservoirs dropped to 33.5% of capacity, marking the lowest September level in a decade. This critical situation immediately raises the specter of rationing, which is a major social and economic disruption.

To mitigate this, the company must demonstrate efficiency gains. The focus is on reducing water losses in the system, which is a key measure of operational quality and social responsibility. Progress is being made through specific projects like the World Bank-supported initiative in the Metropolitan Region of São Paulo. This project, as of January 2025, has successfully saved over 50.5 million cubic meters per year of water, partly by replacing 207 km of the water network. This kind of tangible, infrastructure-focused work is what builds long-term public confidence.

Socio-economic impact of service expansion on low-income populations

The social factor analysis must focus on how SABESP's new, private-sector-led strategy impacts its most vulnerable customers. The goal is to improve health and quality of life through sanitation, but affordability is paramount. The social tariff program is the primary mechanism for this.

As of the third quarter of 2025 (3Q25), the number of people benefiting from the social tariff has reached 1.8 million, representing a 40% increase in one year. This expansion is a direct, positive socio-economic outcome, making essential services accessible to more low-income families.

Additionally, targeted programs are delivering direct impact:

• The Água Legal Program is a key social initiative.
• It has provided improved water access to 605 thousand people.
• It has extended sanitation services to 127 thousand people in vulnerable communities.

This shows that while the company is now private, the regulatory framework and its own programs are driving inclusive service expansion, which is crucial for maintaining social license to operate in a region with significant wealth disparity. What this estimate hides is the ongoing challenge of connecting the remaining millions who still lack proper sewage treatment.

Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS) - PESTLE Analysis: Technological factors

Adoption of smart metering to reduce commercial losses and improve billing accuracy

You can't manage what you don't measure, and for a utility the size of Companhia de Saneamento Básico do Estado de São Paulo (SABESP), unmeasured water-or non-revenue water (NRW)-is a massive financial drain. A key technological pivot is the aggressive rollout of smart meters (telemetering), which directly addresses commercial losses (also called apparent losses) caused by faulty meters, fraud, and billing errors. In the first nine months of 2025, SABESP installed nearly 1 million replacements, significantly accelerating the pace by more than doubling the quarterly installation speed to around 500,000 meters in 3Q25.

This deployment is not just about counting water; it's about real-time data. The new Internet of Things (IoT) connected meters enable instantaneous consumption data, which allows the company to identify anomalies-like a sudden spike or a consistent under-registration-that signal fraud or a meter failure. This shift from manual, once-a-month readings to continuous monitoring is a fundamental change in revenue assurance.

Investment in advanced leak detection technology to cut physical water losses, currently high

The physical water loss (real losses) from aging pipes is still a major headwind, but SABESP is leveraging advanced technology to tackle it head-on. Historically, the company has seen actual water leaks account for roughly 20% of the total water loss in the system.

To reverse this, management has set a clear, quantifiable goal: reduce water losses by a substantial 37% by 2027. This goal requires moving beyond traditional methods to adopt sophisticated leak detection solutions like acoustic and ultrasonic sensors, which are the market leaders, accounting for a 27% revenue share in the global leak detection market in 2024.

Here's the quick math: the company's interventions through programs like the Água Legal Program have already saved over 50.5 million cubic meters per year of water, proving the technology works. The next phase involves integrating these sensors with predictive analytics platforms to pinpoint the exact location of a leak before it becomes a catastrophic main break. That's how you turn a cost center into a reliable asset.

Use of digital platforms for customer service and operational monitoring

Digital platforms are transforming not just the physical network but also the back-office and customer experience. For operations, SABESP is adopting advanced tools like Artificial Intelligence (AI)-driven design software for major infrastructure projects, which has already cut project planning timelines by an impressive 40%.

For the customer, the digital push means better service and transparency. The real-time data collected by the new smart meters feeds into operational monitoring systems, creating a digital twin of the network that allows for faster response times to service interruptions or pressure issues. This is a critical step in improving customer satisfaction, but still, if onboarding takes 14+ days for a new digital service, churn risk rises.

The table below summarizes the key technological drivers and their direct financial impact in 2025:

Technological Initiative	2025 Key Metric/Target	Primary Financial Impact
Smart Meter Adoption (IoT)	Nearly 1 million meters replaced in 9M 2025	Reduces commercial losses (fraud/inaccuracy), strengthens revenue assurance.
Advanced Leak Detection	Target loss reduction of 37% by 2027	Cuts physical water losses, saving over 50.5 million m³ water/year.
AI/Digital Design Tools	Project planning time cut by 40%	Lowers CapEx costs and accelerates delivery of new infrastructure.
Infrastructure Modernization CapEx	Year-to-date CapEx of BRL 10.4 billion in 2025	Expands Regulated Asset Base (RAB) for higher future allowed returns.

Need for modernizing aging infrastructure, which requires significant CapEx

The biggest challenge is the sheer scale of the aging infrastructure. While the new technology is a powerful tool, it needs to be bolted onto a system that is decades old. The need for modernization is the primary driver of the company's massive capital expenditure (CapEx) program.

SABESP is defintely not shying away from the cost. The company's year-to-date CapEx for 2025 has already reached a record BRL 10.4 billion, with a total expected investment of around BRL 15 billion for the full fiscal year. This spending is essential to meet the national universalization targets for water and sewage services by 2033.

This capital is funding not just the smart technology, but also the physical replacement of pipes and expansion of treatment plants. To put the spending in context, CapEx accelerated to a record BRL 4 billion in 3Q25 alone, a 175% increase versus the prior year quarter. This high CapEx is a near-term financial pressure, but it's the engine that will increase the company's Rate Base (Regulated Asset Base), which is the foundation for future, sustainable revenue growth and allowed returns.

• Fund 130,000 new water and sewage connections in Q1 2025.
• Replace 207 km of water network to reduce losses.
• Double the size of the Regulatory Asset Base (RAB) over the 2024-2029 cycle.

Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS) - PESTLE Analysis: Legal factors

Compliance with the New Sanitation Legal Framework (Marco Legal do Saneamento) by 2033

The biggest legal driver for SABESP is the New Sanitation Legal Framework (Marco Legal do Saneamento), Federal Law 14.026/2020. This law sets a strict, non-negotiable deadline for universal access to water and sewage services across Brazil. Specifically, all municipalities must ensure 99% of the population has access to potable water and 90% has access to sewage collection and treatment by December 31, 2033. This isn't a suggestion; it's a legal mandate that underpins SABESP's entire investment thesis and operational strategy.

For SABESP, meeting these targets means an accelerated capital expenditure (CapEx) plan. While I can't provide the exact 2025 fiscal year CapEx figure without current search data, the company's long-term plan requires billions in investment. For context, the company's previously reported investment plan for 2023-2027 was around R$26 billion, and the 2025 allocation is a significant part of that push. Failure to meet the 2033 goals could lead to contract terminations and fines, so the legal risk here translates directly into execution risk.

• Achieve 99% water access by 2033.
• Achieve 90% sewage treatment by 2033.
• CapEx must be sustained to avoid legal penalties.

Finalization of the regulatory model and new contracts with ARSESP (São Paulo's regulatory agency)

The planned privatization of SABESP is fundamentally tied to a new regulatory and contractual structure. The State of São Paulo is working to finalize a new regulatory model, which will be overseen by the state's regulatory agency, ARSESP (Agência Reguladora de Serviços Públicos do Estado de São Paulo). This new model is crucial because it will define the tariff structure, quality standards, and investment obligations for the privatized entity over the next few decades.

The legal finalization involves a new concession agreement that will replace the current, often fragmented, municipal contracts. This process is complex, but the goal is to consolidate the regulatory risk under a single, clear framework. The new contracts must legally ensure that the private operator is committed to the universalization targets. Honestly, the clarity of this new regulatory contract is what will defintely drive investor confidence and valuation.

Here's a quick view of the regulatory shift's impact:

Factor	Current Legal/Regulatory Status	Post-Privatization Legal/Regulatory Status
Contractual Basis	Individual municipal concession agreements	Single, unified concession contract with the State of São Paulo
Regulator	ARSESP (with some municipal oversight)	ARSESP (strengthened role under new framework)
Tariff Review Cycle	Established by current contracts (e.g., 4-year cycle)	Defined by the new regulatory model and concession contract

Legal challenges and municipal contract renegotiations related to privatization

The path to privatization is paved with legal risk, mostly stemming from the nature of the existing contracts. SABESP currently operates under concession agreements with over 370 municipalities in São Paulo. The privatization process legally requires the state to secure the consent of these municipalities, often through renegotiation or adhesion to the new unified contract.

This process is prone to legal challenges from municipal governments or public interest groups who may contest the terms, the valuation, or the legality of transferring the service provision. For example, a municipality might legally argue that the proposed new tariff structure is unfair. The legal framework for privatization-the state law and the new unified contract-must be robust enough to withstand these inevitable court challenges. The legal risk here is one of delay, which can significantly impact the timeline and cost of the transaction.

Strict environmental discharge standards require continuous investment in treatment facilities

Beyond the universalization targets, SABESP operates under increasingly strict environmental laws regarding water quality and effluent discharge. The National Water Agency (ANA) and state-level environmental agencies, like CETESB in São Paulo, impose rigorous standards on the quality of treated sewage discharged into rivers and reservoirs. This legal pressure is constant.

To comply, SABESP must continuously upgrade and expand its sewage treatment plants (STPs). In the 2025 fiscal year, a significant portion of the CapEx budget is legally earmarked for these environmental improvements. For example, as of a recent reporting period, SABESP's sewage treatment coverage was already high, but the legal requirement is not just coverage; it's the level of treatment. The company has to invest in tertiary treatment processes in key areas to meet the highest standards, which involves more advanced technology and higher operating costs. This is a non-negotiable legal cost of doing business.

Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS) - PESTLE Analysis: Environmental factors

The environmental forces impacting SABESP are no longer abstract risks; they are immediate operational challenges tied directly to the company's massive capital expenditure (CapEx) plan. The core action here is tracking the privatization timeline and the final regulatory model. Finance: Monitor the required CapEx schedule against projected 2026 free cash flow by year-end.

Climate change increasing water stress and reservoir volatility in São Paulo

You're seeing the effects of climate change hit the balance sheet right now, not just in some future projection. São Paulo's water security hinges on the Cantareira system, and its volatility is a major risk. For example, on September 21, 2025, the water reserves in the São Paulo Metropolitan Region's integrated system fell to just 32.1% of capacity, marking the lowest level for that date in a decade. The critical Cantareira system itself was down to 29.5%.

This 2025 drop is a sharp 21-point deterioration from the 53.2% recorded just one year prior. To manage this, SABESP has had to implement pressure management, cutting network flow for up to 10 hours overnight (7 p.m. to 5 a.m.) since August 2025. This isn't just a public relations issue; it forces a massive CapEx response. The company is actively working to reduce its dependence on rainfall cycles by expanding infrastructure, bringing forward projects like the Jaguari-Atibainha and São Lourenço Systems, which are part of a broader strategy to connect and secure water supply across nine production systems.

High costs associated with treating polluted water sources like the Tietê and Pinheiros rivers

The pollution in the Tietê and Pinheiros rivers is a direct cost driver for SABESP, making raw water abstraction and treatment more expensive. The state government is tackling this with a massive public-private partnership (PPP) initiative valued at R$ 9.5 billion (US$1.8 billion) to clean up both rivers over a 15-year period. This is a clear opportunity for SABESP to integrate its own sewage collection expansion with the state's cleanup goals, like the Integra Tietê program.

Historically, the investment to de-pollute the Tietê River alone has been significant, totaling around US$3.4 billion since the project began in 1992. The good news is that the pollution stain on the Tietê has been reduced from 530 km to 122 km, a 77% reduction. But the core challenge remains domestic sewage from illegal connections, which SABESP must address through its universalization mandate. The company's focus on the Pinheiros River, through projects like the five Water Quality Restoration Units (URQs) in the Pinheiros River basin, is a concrete example of this operational cost being internalized.

Focus on reducing water loss (non-revenue water) to meet regulatory targets

Non-Revenue Water (NRW)-the water produced but lost to leaks, theft, or metering errors-is a huge efficiency drain. The national regulatory goal (Marco Legal do Saneamento) requires a reduction from the current national average of 40% down to 25% by 2033. SABESP is tackling this head-on with a major technology investment.

The company is rolling out the world's largest smart metering program in the water sector, contracting BRL 3.8 billion in investments to install 4.4 million IoT-enabled smart meters by 2029. This is defintely a game-changer. These efforts are already yielding results: as of May 2024, the company had saved over 50.5 million cubic meters per year of water through various loss reduction interventions.

Need for large-scale investment in sewage treatment to meet universal collection goals

The universalization goal-90% of the population with treated sewage by 2033-is the biggest driver of CapEx. SABESP is aiming to hit this target four years early, by 2029. The company is already close to a key milestone, being only 3% away from meeting the minimum 95% threshold on sewage treatment in the areas it serves.

The sheer scale of the investment is staggering. The total planned CapEx for water and sewage infrastructure to serve the 371 municipalities is R$ 70 billion over the next few years, with R$ 35 billion already contracted or applied. In the first nine months of 2025, the company reinvested BRL 13 billion in construction goods and services, which shows the accelerated pace of execution.

Here's a quick snapshot of the key environmental metrics and investment drivers for the 2025 fiscal year:

Environmental Metric / Driver	2025 Status / Target	Associated Investment (CapEx)
Water Security (Reservoir Level)	São Paulo reserves at 32.1% (Sept 2025), lowest for the date in a decade.	CapEx accelerated to BRL 4 billion in 3Q25, up 175% YoY.
Sewage Treatment Coverage	Goal to reach 97% coverage by year-end 2025. Only 3% away from 95% threshold.	Total planned investment of R$ 70 billion to achieve universalization by 2029.
Non-Revenue Water (NRW) Reduction	Saved over 50.5 million m³ per year of water as of May 2024. National target is 25% loss by 2033.	BRL 3.8 billion contracted for 4.4 million smart meters through 2029.
River De-pollution (Tietê/Pinheiros)	Pollution stain on Tietê reduced to 122 km.	State-led PPP for clean-up valued at R$ 9.5 billion (US$1.8 billion).

The environmental mandates translate directly into a clear investment thesis:

• Expand sewage coverage to meet the 90% national target.
• Invest in system resilience (e.g., new water systems) to mitigate drought risk.
• Deploy technology to reduce water losses and boost operational efficiency.