Access to at least basic water increased from 94% to 97% between 2000 and 2015; an increase in access to at least basic sanitation from 73% to 86% in the same period.WHO/UNICEF: Progress on Drinking Water and Sanitation

Brazil has a national system to finance water and sanitation infrastructure; a high level of cost recovery compared to most other developing countries.

A high number of poor Brazilians live in urban slums (favela) and in rural areas without access to piped water or sanitation. Water is scarce in the northeast of Brazil. Water pollution is common, especially in the southeast of the country. Brazil has a low share of collected wastewater that is being treated (35% in 2000), and long-standing tensions between the federal, state and municipal governments about their respective roles in the sector.

Access In 2015 around 6.2 million people lacked access to "at least basic water", whereas 97% of the population had access to it. The figures were 99% in urban areas and 87% in rural areas.WHO/UNICEF (2015) Progress on sanitation and drinking water - 2015 update and MDG assessment , Joint Monitoring Programme for Water Supply and Sanitation As for access to sanitation, in 2015, 29 million people were without access to "at least basic sanitation", whereas 86% of the population had access to it. This was 91% of the population in urban areas and 58% of the population in rural areas.

In earlier years, access to piped water supply in Brazil stood at 92% and access to improved sanitation also at 79% in 2008. Coverage was significantly higher in urban areas, where 87% of the Brazilian population live. Urban coverage is 100% for water and 85% for improved sanitation, including 53% access to sewerage, the remainder being accounted for by on-site sanitation. Coverage in rural areas, where 13% of Brazil's population lives, is much lower. It stands at 85% for improved water supply and only 44% for improved sanitation. Geographically coverage is lowest in the country's poorest regions: particularly in predominantly rural North, Northeast, and Center-West.

Official data for every municipality in Brazil is published in the National Information System SNIS.

Water use Current water use in Brazil for users served by utilities is 154.9 Liter/capita/day, ranging from an average of 95.3 L/capita /day (state Pernambuco) to 254 L/capita /day (state Rio de Janeiro).Sistema Nacional de Informações sobre Saneamento: Diagnóstico dos Serviços de Água e Esgotos – 2018. Brasília: SNSA/MCIDADES, 2018. 74 p. : il. Water use in Brazilian cities is lower than in some other Latin American cities (370 in Buenos Aires, 259 across cities in Peru, 196 across cities in Chile) and is now much closer to levels in Central Europe (165 in France, 150 in England and 122 in Germany). Increased metering and a higher share of low-income users with low per capita water use may have played a role in the reduced water use.

Reaching the poor Reaching poor urban neighborhoods remains a challenge. This frequently requires non-conventional approaches. While Brazil has pioneered the use of low cost appropriate technology (such as condominial sewers) and active community participation it still faces the challenge of the many informal peri-urban settlements, called favelas, often situated on steep slopes or in flood plains. An example of how the government addresses these issues is the World Bank-supported Low Income Sanitation Technical Assistance Project PROSANEAR.

History and recent developments

The water and sanitation sector has gradually evolved over time. The changes that have occurred have largely been the product of political, economic, social and cultural factors external to the sector.Léo Heller:Water and Sanitation Policies in Brazil:Historical Inequalities and Institutional Change, in: José Estaban Castro and Léo Heller (Editors):Water and Sanitation Services. Public Policy and Management , Earthscan, London 2009, pp. 321-337

Municipal service provision (prior to 1968) Until 1968, the responsibility for water supply and sanitation was municipal. Service providers were municipal water and drainage companies, each of them with different financial and administrative structures. The federal role was limited to the Special Service for Public Health, which lacked funding as well as regulatory or enforcement capacity.da Motta, Ronaldo Seroa, and Moreira, Ajax. 2006. "Efficiency and regulation in the sanitation sector in Brazil." Utilities Policy, 14: p. 186. At that time coverage rates were low and there was no institutional structure to plan and finance an increase in coverage on the necessary scale.Marta T S Arretche: Water supply and sanitation, an undated article on the website of the Brazilian Ministry of Foreign Affairs, accessed in 2007 The military regime that took power in 1964 initially did not intervene in the structure of the sector. The central role of municipalities in water supply and sanitation was thus confirmed by the 1967 Federal Constitution, only to be fundamentally altered a year later.

The National Water Supply and Sanitation Plan PLANASA (1968–1986)

To address the challenges in the sector, the National Water Supply and Sanitation System was created in 1968. It was supported by three newly created institutions:

the National Housing Bank (Banco Nacional de Habitação) or BNH; the Employment Guarantee Fund (FGTS), the main source of funds for Planasa; and 27 state-owned water and sanitation companies (Companhias Estaduais de Saneamento Básico or CESBs).

Planasa was the first federal government initiative in water and sanitation in Brazil. BNH managed the FGTS and, by extension, national urban development policy. Beginning in 1971 State Water and Sanitation Companies (CESBs) were set up in every Brazilian state. Until 1985, only these public companies could obtain financing from BNH for water supply and sanitation, being responsible for construction, operation and maintenance. In order for CESBs to operate in their respective states, they had to obtain municipal licenses to run the services under long-term contracts, because the Brazilian Constitution had already established that the power to grant licences for public water and sanitation services belonged to the municipalities.

The favorable performance of the economy, the scale of the system being installed, the amount of funds available and the subsidized interest rates on loans, all helped services to expand quickly. Between 1970 and 1990, PLANASA expanded coverage from 45% to 95% for water and 24% to 42% for sanitation among urban residents.McNallen, Brendan. 2006. "Fixing the leaks in Brazil's water law: Encouraging sound private sector participation through legal and regulatory reform." Gonzaga Journal of International Law, 9: p. 173-177. Due to their larger territorial scope, state water companies were able to cross-subsidize between different classes of consumers, especially between grossly disparate neighboring municipalities.Tupper, Henrique Cesar, and Resende, Marcelo. 2004. "Efficiency and regulatory issues in the Brazilian water and sewage sector: an empirical study." Utilities Policy, 12: pp. 30-31.

The coverage expansion happened unequally. Investment in water services was given priority because it was less costly and produced a quicker return through water charges. In addition, although there was significant expansion of services all over Brazil, Planasa gave priority to the country's richer regions of the South and South East; most of the investment was concentrated in the larger cities, and within these cities, in the better-off sections of the population. About 3,200 of Brazil's municipalities took advantage of PLANASA (although often without formal contracts), granting concessions to these state companies for 20–30 years. 1,800 municipalities chose to continue providing services directly on their own or indirectly through municipal companies, most of them in the relatively wealthy South-eastern region, particularly in Minas Gerais and São Paulo.Sabbioni, Guillermo. 2008. "Efficiency in the Brazilian sanitation sector." Utilities Policy, 16: p. 13. Arretche gives the percentage of municipal service provision at that time as only 20%.

Other municipalities retained partial autonomy, linked to a Health Ministry entity, now known as the National Health Foundation (Funasa). They operated in accordance with the model established by the Special Service for Public Health over 40 years ago. Services are operated by a municipal agency which is administratively, technically and financially autonomous, but in which there is considerable input from Funasa, whose functions range from administration to technical assistance. In 1993 about 6% of Brazilian municipalities functioned under this system in 625 locations. They are largely concentrated in the North-eastern region.

Planasa coincided with the period of military government in Brazil (1964–1985) (see also History of Brazil), which has left its mark on the corporate culture of the state water companies at the time. For example, Lemos and Oiveira labeled the state water and sanitation companies as "pre-democratic institutions" that perceived themselves as "islands of competence", constituting an "infallible technocracy" which systemically warded off public involvement in policy-making.Lemos, Maria Carmen, and de Oliveira, João Lúcio Farias. 2005. "Water Reform across the State/Society Divide: The Case of Ceará, Brazil." Water Resources Development, 21(1): p. 137. PLANASA also reduced the role of many municipal governments to signing concession contracts with state water companies, leaving them with a sense of marginalization.Barraqué, B., Formiga Johnsson, R.M., and Britto, A.L. 2007. "Sustainable water services and interaction with water resources in Europe and in Brazil." Hydrology and Earth System Sciences Discussions, 4: 3454. The return to democracy and the decline in federal funding encouraged many states and municipalities to devolve services to the local level. Some also began to seek private concessions. Water and sanitation policy thus entered a new era that was characterized by an environment of increasing legal uncertainty and political controversy.

Gradual municipalization, some private sector participation (1986–2002) In 1986 the Housing Bank BNH was dissolved and management of the FGTS, the key financing instrument for the sector, was passed on to the Caixa Econômica Federal (CEF), under the supervision and control of the Supervisory Council of the FGTS (CCFGTS). However, the sector policy functions of BNH were not passed on to CEF and national policy for sanitation became the responsibility of various bodies in charge of urban management. PLANASA was formally abolished in 1992, making it more difficult for state governments to finance state water companies. The 1988 Federal Constitution does not clearly assign the responsibility for water supply and sanitation to either municipalities or states. Both can implement programs, provided the basic guidelines issued by the Federal Government are followed. A complicated web of un-enforced or weakly enforced statutory requirements (e.g. permit requirements) persisted. An effect of the new constitution was to render the responsibility for water provision "less clearly defined". Article 30 of the 1988 constitution allows municipal government to legislate in matters of "local interest" and to "organize and provide, directly or by concession or permit, the public services of local interest", but does not resolve a variety of "unclear property rights" questions relating to the concession authority of municipalities. Nevertheless, state water companies continue to be regulated almost exclusively by state governments.