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IFC – Manual for Performance-Based Contracting by Water Utilities in Brazil

Performance-based contracting can improve public water utility operational efficiency levels, and consequently, the quality of the public services rendered.

This manual has seven sections. Section 2 offers a brief description of the current situation regarding Brazil’s water utility companies’ water losses and energy use. Section 3 explains why it is advantageous to use performance contracts as a means to reduce water losses and to foster energy efficiency in water utility companies. Section 4 demonstrates how to conduct a technical evaluation of the water losses and use of energy by water utility operators. Section 5 prescribes how to carry out an economic-financial feasibility study, enabling water utility operators to verify if the benefits of undertaking a water loss reduction program justify the costs. Section 6 offers details on the legal aspects of a performance contract. Finally, Section 7 presents a brief summary and some conclusions.