Sabesp () management is ready to begin new operations after the recently privatized company reaches an essential expansion target defined by the state government.
The largest sanitation company in Latin America is “evaluating all the opportunities that are emerging in the market”, said CEO Carlos Piani in an interview. “We are ahead of our goals, which allows us to dream.”
Sabesp hopes to benefit from more than R$62 billion (US$11.6 billion) in auctions, partnerships and concessions planned in Brazil until the end of 2027. The company is also open to acquisitions — over the weekend, it purchased a majority stake in another company that operates in the energy and water sectors in São Paulo.
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The São Paulo government gave up control of Sabesp in July 2024, transferring a strategic stake to Equatorial Energia as part of the privatization process led by a rising name on the Brazilian right. Despite doubts about Equatorial’s experience in sanitation, Sabesp is moving forward with its plan to expand service coverage to more than 90% of the state’s population.
The company has already reached its water supply targets for 2025 and is close to meeting its sewage targets, with 1.3 million people having access to services in the first half of 2025. The so-called “universalization” is a priority, as failure to meet targets can generate fines of up to R$26 billion, according to Piani, who took charge a year ago.
“As we move forward with the challenge here at Sabesp, we gain credibility to look at acquisition opportunities with more diligence and seriousness,” said the executive. “The plan to grow in São Paulo and outside of São Paulo is real”, he stated at the company’s headquarters on September 30, shortly before the announcement of the new business.
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helps fill gaps in the metropolitan region. The R$1.1 billion deal, still subject to regulatory and antitrust approval, “reinforces Sabesp’s long-term strategy of integrating water and energy assets in Greater São Paulo, expanding operational control and water security,” wrote analyst João Pimentel, from Citigroup, in a report to investors on Sunday.
According to Piani, the deal with EMAE “came about passively”. “We were approached by the lender,” he told analysts on Monday in a conference call. The executive expects regulatory approval by the end of the year and closing in the first quarter. The transaction is challenged in court by a Brazilian businessman who held shares in EMAE before they were taken over by creditors and sold to Sabesp.
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Sabesp shares fell 2.2% in the week, closing at R$124.81 on Tuesday (7). The paper, which was worth around R$67 when the government lost control, reached more than R$132 last month. Since July 2024, the gain of more than 40% easily exceeds the 10.6% advance of the Ibovespa in the same period. Among the 17 analysts monitored by Bloomberg, only one recommends selling.
In addition to the expected efficiency gains, financial performance has pleased investors. In the second quarter, net profit rose 77% over the same period in 2024, when the company was still being privatized. Adjusted Ebitda increased 21%.
The company has an investment plan of R$70 billion until 2029, to reach the state goal of providing water to 99% of residents and sewage coverage to 90% in the 375 municipalities already served.
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With at least nine sanitation auctions planned in the country and new opportunities within São Paulo, the sector remains heated. The state plans to bid for services in more than 210 cities by mid-2026, in contracts estimated at R$75 billion. Bloomberg reported in April that Sabesp is among those interested.
Analysts are also monitoring the company’s possible role in future privatizations of state-owned sanitation companies, such as Copasa, in Minas Gerais.
Sabesp now faces its first tariff adjustment test, with annual prices defined by state regulators. With Governor Tarcísio de Freitas eyeing re-election — or a presidential bid in 2026 — the next review could be especially sensitive.
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The result will be, according to analysts, the next relevant trigger for the stock. Itaú mentioned “limited visibility on the final methodology” in a recent report. Piani stated that he hoped that “the contract will be fulfilled”, but did not comment on values. He also said that a state fund, created with resources from the sale of the government’s stake, could subsidize fares for low-income families if the adjustment exceeds inflation.
As long as past investments are not fully incorporated into tariffs, Sabesp needs to “access practically all available sources” of financing, stated the CEO. The company raised R$15 billion in 2025 and should maintain a similar pace next year, given the strong global appetite for infrastructure assets.
Piani said he did not see an immediate need for a new share offering, but did not rule out the possibility. “We don’t need this in the short term,” he said. “But it is an alternative if there is a relevant opportunity for profitable growth.”
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