The World Bank Board of Directors has approved a US$110 million loan to support the state of Sergipe, Brazil. This project aims to strengthen fiscal sustainability and improve natural resource management in Sergipe, Brazil's smallest state by geographic area. The initiative addresses significant development challenges faced by the state, including low GDP per capita and high poverty rates.
The project will help Sergipe implement a new fiscal framework designed to limit current expenditure growth, reduce public procurement costs, and enhance overall fiscal management. In addition to these fiscal reforms, the project will address environmental concerns such as water scarcity exacerbated by climate change. Efforts will focus on improving water resource management and increasing the use of clean energy. Policies to manage water resources efficiently, including raw water fees and encouraging private investment in infrastructure, aim to increase resilience against droughts. The project also promotes solar energy use to reduce reliance on hydropower and addresses solid waste management through increased recycling efforts.
Aligned with Brazil’s Country Partnership Framework (CPF), the project supports broader goals of fostering a productive, inclusive, and environmentally sustainable economy. It reflects the CPF’s emphasis on improving fiscal management and natural resource governance, contributing to a greener economy and increased resilience to climate shocks. Expected benefits include improved water quality, increased access to sanitation, and enhanced environmental conservation.
The World Bank's support highlights its commitment to helping Sergipe navigate its development challenges and achieve sustainable growth. Strengthening institutions and ensuring effective implementation of these critical reforms are essential for paving the way for a more resilient future for Sergipe.
“Sergipe has been working on improving fiscal management and sustainability, seeking a partnership with the World Bank to restructure its debt and strengthen natural resource management. This collaboration will allow for reduced interest expenses, extended payment terms, and ensure more resources for investments and public policies,” stated Fábio Mitidieri, Governor of Sergipe.
“The World Bank is proud to support the state of Sergipe in its efforts to enhance fiscal sustainability and improve natural resource management,” said Johannes Zutt, World Bank’s Country Director for Brazil. “This project represents a significant step toward addressing the state’s development challenges and building resilience against climate change.”
Contact details:
Brasilia
Sidrônio Henrique
sgomesdearaujo@worldbankgroup.org
Washington, DC
Yuri Szabo Yamashita
yszaboyamashita@worldbank.org
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