By Brazil Stock Guide – Sabesp, formally Companhia de Saneamento Básico do Estado de São Paulo, won approval to increase water withdrawals from the Paraíba do Sul basin, a key source for Rio de Janeiro, as Brazil’s largest state seeks to shore up supplies during a dry spell.
The temporary authorization allows the São Paulo water utility, listed in São Paulo as SBSP3 and in New York as SBS, to transfer more water from the Jaguari reservoir, part of the Paraíba do Sul system, to Atibainha, one of the reservoirs that make up the Cantareira system. The move was first reported by Estadão.
Cantareira, which supplies about 10 million people in the São Paulo metropolitan region, was operating at 39.9% of its capacity on Monday, below the historical average of 55.5% for the period. The level is considered a point of attention under the operating rules for São Paulo’s main water supply network.
The decision was made under an agreement signed last week in Brasília by officials from São Paulo, Rio de Janeiro and Minas Gerais, the three states crossed by the Paraíba do Sul River. The pact also involves Brazil’s National Water and Basic Sanitation Agency, known as ANA, São Paulo’s SP Águas, Minas Gerais’ IGAM water management institute and Rio de Janeiro’s state environmental agency, Inea.
Under the authorization, the maximum annual volume that may be transferred from Jaguari to Atibainha in 2026 will rise to 268.28 cubic hectometers from 162 cubic hectometers. The increase represents an additional 106.28 cubic hectometers of water, with a maximum withdrawal flow of 8.5 cubic meters per second. One cubic hectometer is equivalent to 1 billion liters.
Sabesp said the measure is allowed under Cantareira’s operating rules and “is part of the company’s permanent strategy to expand water security” in the region. The company also cited plans to invest 7.8 billion reais through 2030 in new interconnections and modernization of its water infrastructure.
The authorization is exceptional and temporary, expiring on Dec. 31, 2026. It is meant to reinforce water security in Greater São Paulo and the Piracicaba, Capivari and Jundiaí river basins, known as PCJ, amid persistent drought conditions and pressure on the metropolitan supply network.
São Paulo’s Integrated Metropolitan System, which includes Cantareira, Alto Tietê, Cotia, Guarapiranga, Rio Claro, Rio Grande and São Lourenço, was operating at 52.5% of useful volume on Monday.
The additional transfer can be automatically suspended if Cantareira rises above 60% of useful volume or if Sabesp begins using its average monthly withdrawal flow without restrictions, meaning without meeting water-saving targets.
Cantareira currently operates in range 2 of its rule curve, though its useful volume is below the threshold set for that classification. If the level remains below 40% through Tuesday, the system will move to range 3, an alert stage. Under that category, the authorized withdrawal from Cantareira falls to 27 cubic meters per second from 31 cubic meters per second.
Sabesp will also be required to take steps to mitigate potential impacts from lower levels at hydropower reservoirs in the Paraíba do Sul basin, including Jaguari, Santa Branca, Paraibuna and Funil.
The agreement keeps minimum downstream flow limits at the Santa Cecília dam, including an instantaneous minimum outflow of 71 cubic meters per second and pumping of 119 cubic meters per second to the Guandu River. Guandu is the main source of water for Rio de Janeiro’s metropolitan region, serving about 9 million people.
In addition to the supplementary withdrawal, water management agencies approved temporary adjustments to operating rules for some reservoirs in the Paraíba do Sul hydraulic system through December 2027. The changes are designed to give authorities more flexibility in managing water storage and will be monitored by an advisory group overseeing the Paraíba do Sul system.
That group will be responsible for setting triggers and defining additional operating measures if reservoir levels approach or exceed safety curves for normal operations.
Regulators and basin committees will continue studies to assess the impact of the additional transfer and identify alternatives to increase water availability in the Paraíba do Sul, Piracicaba and Alto Tietê basins.
The measure echoes previous emergency responses to drought in southeastern Brazil. In 2021, during a severe water crisis, the annual transfer limit was increased to 202 cubic hectometers from 162 cubic hectometers. In 2025, amid continued dry conditions, authorities temporarily raised the quota to 186.7 cubic hectometers.
The issue has political sensitivity. During Brazil’s 2014 water crisis, São Paulo and Rio de Janeiro clashed over plans to move water from the Paraíba do Sul basin to Cantareira, prompting objections from Rio and Minas Gerais over risks to water supply and power generation. The dispute ended in August 2014 after federal mediation produced a court-backed agreement governing withdrawals through the Jaguari-Atibainha system.
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