Private Sector Performance Contracting in the Water Sector: The Case of SABESP: Case Study

Water systems in Latin America are inefficient in part because of very low relative investment and in part because of the lack of availability of necessary management tools. One way to address both of these issues at the same time is the performance financing of micro-metering by private sector companies. This case study is written to highlight the counter-intuitive fact that the great inefficiencies in Latin American water systems offer strong opportunities for public/private risk sharing. Specifically addressed is the case of the water company Sabesp in São Paulo and their affect on the market.