BR Enhancing Prosperity and Sustainability in the State of Sergipe Development Policy Financing

The development objective of Enhancing Prosperity and Sustainability in the State of Sergipe Development Policy Financing Project for Brazil is to support the State of Sergipe to: (i) strengthen fiscal sustainability and (ii) improve the management of natural resources in the areas of water, sanitation, solar energy and solid waste. The government of Sergipe’s program outlines a multifaceted strategy to address key challenges, emphasizing poverty reduction, economic development, infrastructure, sustainability, strengthened governance and efficient state management. Highlighting a strong commitment to strong environmental stewardship, the government’s program also sets strategic goals for improving environmental sustainability and natural resource management, including through sanitation. Key aspects include the expansion and improvement of access to water and sanitation with a focus on improving service delivery. Further, the program focuses on promoting regionalized and integrated solid waste management and strengthening water resources management to enhance resilience to the impacts of climate change. Reforms supported under the program are instrumental to achieving these objectives. The first pillar of the Development Policy Finance (DPF) supports reforms that improve fiscal sustainability. The second pillar of the DPF supports selected policies to improve the management of natural resources. The two pillars of the DPF are closely aligned with the guiding themes of the government’s Multiannual Plan (Plano Plurianual – PPA). The proposed operation is aligned with the goals of the Paris Agreement. The project is compliant with the Maximizing Finance for Development (MFD) approach by implementing fiscal management and regulatory reforms that will enable new private sector investment.