WASHINGTON, DC, December 16, 2025 - The World Bank Board of Directors has approved a new operation to strengthen fiscal sustainability and promote economic development in the State of Piauí, Brazil. This Development Policy Financing (DPF) will support reforms to improve the quality of public expenditure and expand private sector participation in water and land resources management, areas fundamental for the state's long-term growth.
Representing a financing support package of JPY 58,000,000,000 (US$376,623,377 equivalent), the operation will expand fiscal space and improve regulatory conditions, generating jobs, stimulating private investment, and strengthening economic opportunities, particularly in agriculture and natural resource management.
"Piauí has secured a World Bank operation to strengthen its fiscal sustainability. The support endorses the New Fiscal Regime, which introduces expenditure ceilings, fiscal targets, and improvements in Public Investment Management (PIM), helping preserve the state's credit conditions," said Piauí Governor Rafael Fonteles. "This fiscal solidity will enable further progress in water resource management, infrastructure, and land regularization, boosting private investment, economic development, and job creation across the state."
"This operation strengthens Piauí's ability to deliver better public services and unlocks new opportunities for sustainable and inclusive growth," stressed Cécile Fruman, World Bank Country Director for Brazil. "By advancing fiscal reforms and modernizing the management of water and land resources, the state is taking essential steps to improve resilience, attract private investment, and generate more and better jobs for the population, ensuring that economic opportunities reach those who need them most."
Key Policy Areas Supported
• Fiscal Sustainability and Public Expenditure Efficiency: The operation supports the adoption of a fiscal framework to reduce current spending, modernize procurement, and introduce a new public investment management system. These measures are expected to increase the current savings ratio to 8 percent of revenues by 2026 and enhance the quality of public investment projects.
• Water Sector Efficiency and Private Sector Participation: Reforms strengthen the financial autonomy of the state water regulator, modernize raw water charging to promote efficient use, and encourage private sector investment in water supply and sanitation, expanding access and improving services for low-income households and women.
• Land Regularization: Digitalizing the land regularization system will shorten processing times from 90 to 30 days, expand legal security for small landholders, and support sustainable agricultural development. Greater land security and improved governance are also expected to foster investment, rural productivity, and rural employment.
These reforms are aligned with Brazil's 2024-2027 Multiannual Plan, the state's long-term development strategy, and the World Bank's Country Partnership Framework for Brazil. The operation contributes to Brazil's climate and sustainability agenda by improving water governance, reducing environmental pressures, and advancing the sustainable use of natural resources.
The DPF also complements ongoing World Bank support to the state through the Progestão Piauí and Piauí Pillars of Growth and Social Inclusion - Phase 2 projects, which reinforce institutional capacity and the implementation of priority reforms.
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