FGV Projetos produced the financial feasibility study that enabled the Usina São Paulo consortium to win the public tender to renovate, remodel and retrofit the area around Traição Pumping Station on Sao Paulo’s south side. The consortium offered R$280 million, 1,900% more than the government’s proposal. The tender took place in early September.

The innovative study, led by José Bento Amaral, the executive manager of FGV Projetos, structured the financial model for the project, which involves paying to use areas adjacent to the pumping station, which belongs to utility company EMAE.

The aim is to improve the site’s integration with the urban landscape and generate commercial revenues between now and 2042, when the concession will end.

This innovative financial model, which involves risk sharing, resulted in a real-terms internal rate of return of 9.07% while paying a fixed annual fee of R$14 million as well as a staggered variable fee based on gross revenue. The study’s technical coordinator was Professor Joelson Sampaio of the Sao Paulo School of Economics. He was supported by technicians Juliano Almeida and Pierre de Souza of FGV Projetos.