The World Bank Board of Directors has approved a new Development Policy Financing (DPF) operation to support fiscal sustainability and economic development in the State of Piauí, Brazil. The financing package amounts to JPY 58 billion, equivalent to approximately US$376.6 million, and aims to improve public expenditure quality and encourage private sector participation in water and land resource management.
According to Piauí Governor Rafael Fonteles, “Piauí has secured a World Bank operation to strengthen its fiscal sustainability. The support endorses the New Fiscal Regime, which introduces expenditure ceilings, fiscal targets, and improvements in Public Investment Management (PIM), helping preserve the state’s credit conditions. This fiscal solidity will enable further progress in water resource management, infrastructure, and land regularization, boosting private investment, economic development, and job creation across the state.”
World Bank Country Director for Brazil Cécile Fruman stated: “This operation strengthens Piauí’s ability to deliver better public services and unlocks new opportunities for sustainable and inclusive growth. By advancing fiscal reforms and modernizing the management of water and land resources, the state is taking essential steps to improve resilience, attract private investment, and generate more and better jobs for the population, ensuring that economic opportunities reach those who need them most.”
The DPF focuses on three main policy areas:
- Fiscal Sustainability and Public Expenditure Efficiency: The initiative supports a new fiscal framework designed to reduce current spending through measures such as modernized procurement processes and an updated public investment management system. These efforts are expected to increase the state's current savings ratio to 8 percent of revenues by 2026 while improving the quality of public investments.
- Water Sector Efficiency and Private Sector Participation: Reforms include enhancing the financial autonomy of Piauí's state water regulator, updating raw water charging systems for efficiency, and encouraging private sector involvement in water supply and sanitation projects. These changes aim to expand access—especially for low-income households and women—and improve service delivery.
- Land Regularization: By digitalizing land regularization procedures, processing times are expected to decrease from 90 days to 30 days. This should enhance legal security for small landholders while supporting sustainable agricultural development. Improved governance in this area is anticipated to promote investment as well as rural productivity and employment.
These reforms align with Brazil’s 2024-2027 Multiannual Plan as well as Piauí's long-term development strategy. They also fit within the World Bank’s Country Partnership Framework for Brazil by contributing toward climate goals through improved water governance, reduced environmental pressures, and sustainable use of natural resources.
The DPF complements existing World Bank initiatives in Piauí such as Progestão Piauí and Piauí Pillars of Growth and Social Inclusion – Phase 2 projects. These ongoing efforts aim at strengthening institutional capacity while supporting priority reforms.