Companhia de Saneamento Básico do Estado de São Paulo - Sabesp (SBS): Analyse Pestle [Jan-2025 MISE À JOUR]

Au cœur de la région économique la plus dynamique du Brésil, Sabesp est une infrastructure critique Titan, gérant les services d'eau et d'assainissement pour 28,5 millions personnes à travers 375 municipalités. Cette entreprise d'État aborde un paysage complexe de défis politiques, économiques et environnementaux, transformant la gestion de l'eau à travers des technologies de pointe et des pratiques durables. Plongez dans notre analyse complète du pilon pour découvrir la dynamique complexe qui façonne les opérations stratégiques de Sabesp et son rôle pivot dans l'écosystème urbain de São Paulo.

Companhia de Saneamento Básico Do Estado de São Paulo - Sabesp (SBS) - Analyse du pilon: facteurs politiques

Structure d'entreprise publique

Sabesp est à 50,3% détenue par le gouvernement de l'État de São Paulo, avec 36,6% des actions négociées à la Bourse de B3 et à NYSE. L'entreprise opère sous le contrôle direct du gouvernement de l'État avec une influence politique importante.

Répartition de la propriété	Pourcentage
Gouvernement de l'État de São Paulo	50.3%
Public Float (B3 et NYSE)	36.6%
Autres actionnaires	13.1%

Environnement réglementaire

SABESP fonctionne dans plusieurs cadres réglementaires:

• Loi fondamentale nationale de l'assainissement (loi 11 445/2007)
• Nouveau cadre juridique de l'assainissement (loi 14 026/2020)
• Mécanismes de réglementation au niveau de l'État

Vulnérabilités d'investissement politique

Les changements politiques ont un impact direct sur les priorités d'investissement des infrastructures. Les vulnérabilités clés comprennent:

• Risques d'allocation du budget
• Changements d'infrastructure du cycle politique
• Priorités d'investissement gouvernemental

Métriques d'investissement politique	Valeur 2023
Budget d'investissement des infrastructures	1,2 milliard de R
Cible d'expansion de l'assainissement du gouvernement	Couverture d'eau à 90%
Cible du traitement des eaux usées	85% d'ici 2033

Mécanismes de responsabilité de la gouvernance

SABESP est soumis à plusieurs cadres de responsabilité:

• Surveillance du gouvernement de l'État
• Exigences de transparence publique
• Législation sur la responsabilité fiscale

Métriques de gouvernance	Niveau de conformité
Indice de transparence publique	8.7/10
Représentations publiques annuelles	100% conforme
Conformité à l'audit externe	Compliance complète

Companhia de Saneamento Básico do Estado de São Paulo - Sabesp (SBS) - Analyse du pilon: facteurs économiques

Opère dans la plus grande région économique du Brésil avec des sources de revenus stables

Sabesp opère principalement dans l'État de São Paulo, qui représente 32,2% du PIB du Brésil. La société dessert 375 municipalités, avec une couverture populaire totale d'environ 28,1 millions de personnes.

Métrique financière	Valeur 2022	Valeur 2023
Revenus d'exploitation nets	R 14,8 milliards de dollars	16,2 milliards de rands
EBITDA	5,6 milliards de R	6,1 milliards de dollars
Revenu net	2,3 milliards de R	2,7 milliards de R

En fonction des allocations budgétaires de l'État et de l'investissement des infrastructures

SABESP s'appuie sur les investissements d'État sur les infrastructures, avec 1,2 milliard de R alloués aux améliorations des infrastructures en 2023. Le soutien du gouvernement de l'État représente environ 18% du capital d'investissement total.

Exposés aux fluctuations économiques brésiliennes et à la volatilité des devises

Indicateurs économiques brésiliens affectant Sabesp:

• Taux d'inflation (2023): 4,62%
• Brésilien réel à USD Taux de change: 1 USD = R 4,93 $
• Taux d'intérêt de la base brésilienne de la Banque centrale: 11,25%

Génère des revenus grâce aux dispositions des services d'eau et des eaux usées

Catégorie de service	2022 Revenus	Revenus de 2023
Approvisionnement en eau	8,9 milliards de R	9,7 milliards de R
Services d'égout	5,9 milliards de R	6,5 milliards de R
Revenus de service total	R 14,8 milliards de dollars	16,2 milliards de rands

Couverture des services d'eau et d'égouts: 98,7% d'approvisionnement en eau, 92,4% de collecte des eaux usées dans les municipalités desservies.

Companhia de Saneamento Básico Do Estado de São Paulo - Sabesp (SBS) - Analyse du pilon: facteurs sociaux

Fournisseur d'infrastructures critiques

Sabesp opère dans 375 municipalités de l'État de São Paulo, fournissant des services essentiels d'eau et d'assainissement.

Couverture de service	Municipalités totales	Population a servi
Approvisionnement en eau	375	28,5 millions
Traitement des eaux usées	366	25,1 millions

Démographie de la population

SABESP dessert une population urbaine diversifiée avec des variations socioéconomiques importantes.

Zone urbaine	Densité de population	Taux de couverture du service
Metropolitan São Paulo	2 500 habitants / km²	99.1%
Régions intérieures	150-300 habitants / km²	95.7%

Gestion durable de l'eau

La demande publique de gestion durable de l'eau a considérablement augmenté, motivé par la conscience de l'environnement et la rareté des ressources.

Métriques de conservation de l'eau	Performance de 2023
Réduction de la perte d'eau	14.2%
Taux de traitement des eaux usées	87.3%

Conditions de vie urbaine et santé publique

Les investissements à l'infrastructure de SABESP ont un impact direct sur le niveau de vie urbain et la santé communautaire.

Indicateurs d'impact sur la santé	Statistiques annuelles
Réduction de la maladie à base d'eau	Diminution de 62%
Investissement d'infrastructure d'assainissement	1,2 milliard de R

Companhia de Saneamento Básico do Estado de São Paulo - Sabesp (SBS) - Analyse du pilon: facteurs technologiques

Mise en œuvre des technologies avancées de traitement et de surveillance de l'eau

SABESP a investi 412,5 millions de rands dans les technologies avancées de traitement de l'eau en 2023. La société exploite 119 usines de traitement de l'eau dans l'État de São Paulo, en utilisant la filtration membranaire et les systèmes de désinfection des UV.

Type de technologie	Nombre d'installations	Investissement (R $)
Systèmes de filtration membranaire	42	187,6 millions
Systèmes de désinfection UV	77	224,9 millions

Investir dans la transformation numérique et les systèmes de gestion de l'eau intelligente

SABESP a alloué 285,3 millions de R $ pour les initiatives de transformation numérique en 2023, mettant en œuvre des capteurs IoT et des plateformes de surveillance en temps réel.

Technologie numérique	Couverture	Investissement (R $)
Capteurs de qualité de l'eau IoT	3 647 km de réseau	126,7 millions
Systèmes de mesure intelligents	1,2 million de compteurs connectés	158,6 millions

Développer des technologies de détection des fuites et de conservation de l'eau

SABESP a réduit les pertes d'eau de 14,5% grâce à des technologies avancées de détection des fuites, investissant 176,8 millions de rands en 2023.

Technologie de détection des fuites	Réduction de la perte d'eau	Investissement (R $)
Réseaux de capteurs acoustiques	8.3%	92,4 millions
Systèmes de maintenance prédictive	6.2%	84,4 millions

Utilisation du SIG et de l'analyse des données pour la gestion des infrastructures

SABESP a mis en œuvre des SIG et des plateformes d'analyse de données complets couvrant 99,2% de son infrastructure opérationnelle, avec un investissement de 214,6 millions de rands en 2023.

Plateforme d'analyse de données	Couverture des infrastructures	Investissement (R $)
Systèmes de cartographie géospatiale	99.2%	124,7 millions
Analyse des infrastructures prédictives	87.5%	89,9 millions

Companhia de Saneamento Básico Do Estado de São Paulo - Sabesp (SBS) - Analyse du pilon: facteurs juridiques

Lié par le cadre national de l'assainissement et la conformité réglementaire

Sabesp opère sous Loi n ° 14.026 / 2020, le nouveau cadre juridique pour l'assainissement de base au Brésil. L'entreprise est légalement mandatée pour se conformer aux normes réglementaires nationales établies par Agência nacional de Águas e SaneAmento Básico (Ana).

Cadre réglementaire	Exigences légales clés	Statut de conformité
Loi nationale sur l'assainissement	Couverture universelle de l'eau et des eaux usées	Mise en œuvre continue
Gestion des ressources en eau	Utilisation durable de l'eau	Protocoles de surveillance stricts
Protection de l'environnement	Normes de traitement des eaux usées	Taux de conformité de 98,3%

Sous réserve des lois sur la protection de l'environnement et la gestion des ressources en eau

Sabesp doit adhérer à Politique environnementale nationale (loi 6.938 / 1981) et Politique nationale des ressources en eau (loi 9.433 / 1997). L'entreprise est tenue d'obtenir et de maintenir des licences environnementales pour toutes les activités opérationnelles.

Réglementation environnementale	Exigence spécifique	Métrique de conformité SABESP
Licence environnementale	Permis environnementaux opérationnels	100% licences courantes
Gestion des ressources en eau	Quotas d'extraction de l'eau	Dans les 95% des limites allouées

Requis pour répondre aux normes strictes de qualité et de prestation de services

Sabesp doit se conformer à Décret de normes de qualité 5.440 / 2005, ce qui oblige les mesures transparentes de la qualité de l'eau et des mesures de prestation de services.

• Fréquence de surveillance de la qualité de l'eau: quotidien
• Efficacité minimale du traitement de l'eau: 99,5%
• Collection des eaux usées à São Paulo: 87,4%

Vulnérable aux défis juridiques potentiels et aux changements réglementaires

La société fait face à des risques juridiques potentiels de la non-conformité environnementale, des défaillances de la prestation de services et de l'évolution des paysages réglementaires.

Catégorie de risque juridique	Impact potentiel	Stratégie d'atténuation
Litige environnemental	Amendes potentielles jusqu'à 50 millions de R	Programmes de conformité proactifs
Non-conformité réglementaire	Restrictions opérationnelles de service	Surveillance légale et réglementaire continue

Companhia de Saneamento Básico do Estado de São Paulo - Sabesp (SBS) - Analyse du pilon: facteurs environnementaux

Engagé dans la gestion durable des ressources en eau

SABESP gère 375 installations de traitement de l'eau dans l'État de São Paulo. La société traite 67,5 millions de mètres cubes d'eau quotidiennement et dessert 27,7 millions de personnes.

Métrique de gestion de l'eau	Données quantitatives
Installations totales de traitement de l'eau	375
Volume quotidien de traitement de l'eau	67,5 millions de m³
Population a servi	27,7 millions de personnes

Mise en œuvre des programmes de conservation de l'eau et de recyclage

SABESP a investi 412,5 millions de rands dans les initiatives de conservation de l'eau en 2023. Le taux de recyclage de l'eau de la société a atteint 22,3% de la production totale d'eau.

Métrique du programme de conservation	Valeur
Investissement dans la conservation	412,5 millions de R
Taux de recyclage de l'eau	22.3%

La lutte contre le changement climatique sur les infrastructures d'eau

Sabesp a mis en œuvre Mises à niveau des infrastructures de résilience climatique Dans 42 municipalités, avec un investissement de 689 millions de R $ ciblant spécifiquement les stratégies d'adaptation climatique.

Métrique d'adaptation climatique	Données quantitatives
Les municipalités avec des mises à niveau de résilience climatique	42
Investissement dans l'adaptation climatique	689 millions de R

Réduire l'empreinte environnementale et la préservation écologique

SABESP a réduit les émissions de carbone de 18,7% en 2023, avec une réduction totale de gaz à effet de serre de 124 500 tonnes métriques d'équivalent CO2.

Métrique de l'empreinte environnementale	Valeur
Réduction des émissions de carbone	18.7%
Réduction équivalente totale de CO2	124 500 tonnes métriques

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.