WASHINGTON, DC, March 27, 2025 - The World Bank Board of Directors approved today a financing package to help implement policies that strengthen fiscal and environmental governance while boosting climate resilience in the state of Alagoas, Brazil, in one of the country's most vulnerable regions. The JPY41,623 million (US$277.4 million equivalent) "Brazil State of Alagoas Sustainable Development Policy Loan" aims to improve the sustainable management of public and environmental resources.
Alagoas faces significant socio-economic challenges, with 38% of the population living in poverty in 2023. Among children aged 0 to 14 years, the poverty rate reached 59% in that same year. The state also grapples with high deforestation rates, soil degradation, and water scarcity, which threaten rural livelihoods and drive migration. This new financing will enable the government of Alagoas to implement critical fiscal and environmental reforms, expanding investment in infrastructure, public services, and climate policies. The expansion of public services will mostly benefit the poorest population.
"The World Bank is proud to support Alagoas in building a more sustainable and resilient future," said Johannes Zutt, World Bank Country Director for Brazil. "This project will strengthen the state's fiscal governance while advancing innovative environmental policies that benefit both the local population and the economy."
Key Project Highlights
· Improved Public Services: This project will specifically target the improvement of public services such as healthcare, education, and sanitation, which are vital for the poor population in the state. These sectors have been prioritized in the government's Multi-Year Plan for 2024-2027 and will be directly enhanced through the implementation of fiscal reforms and increased public investment.
· Poverty Alleviation: The project aims to address the high poverty levels in Alagoas, particularly among children, by improving essential services that directly benefit vulnerable populations. By improving fiscal management, this financing will allow the state to allocate more resources to sectors like social protection and housing, which are critical in alleviating poverty.
· Sustainable Fiscal Management: Implementation of a new fiscal framework to optimize costs and boost public investment.
· Public Resource Governance: Improve state asset management for better infrastructure and property administration and promote strategic investments.
· Environmental and Climate Policy: Strengthen environmental regulations, create incentives for biodiversity conservation, and implement climate mitigation and adaptation strategies.
· Sustainable Development: Streamline environmental licensing procedures and promote of climate-resilient farming in the Caatinga biome.
This financing is aligned with Brazil's 2024-2027 Multi-Year Plan and the World Bank's Country Partnership Framework (CPF), ensuring that the implemented policies contribute to sustainable economic growth and environmental preservation in Brazil.
By implementing these reforms, Alagoas is paving the way for a more inclusive and sustainable future, improving the quality of life for its residents while increasing resilience to economic and climate challenges.
Website: www.bancomundial.org.br
