WASHINGTON DC, APRIL 29, 2025 - The World Bank Board of Directors has approved the Bahia State Sustainable Infrastructure Program, an initiative aimed at transforming the state's infrastructure to be more resilient, environmentally sustainable, and inclusive. This program is supported by a Development Policy Loan (DPL) of US$200 million from the World Bank and focuses on reforms in the transport and energy sectors. Enhancing these areas, along with digital infrastructure, will help boost economic competitiveness, lower logistics costs for firms and households, and create new industries and jobs.
The initiative aims to significantly improve the long-term resilience of Bahia's road infrastructure. It seeks to reduce weather-related disruptions and lower transport costs for firms and households. By June 2027, 100 percent of new road rehabilitation, construction, and proactive maintenance contracts for works on State highways will explicitly consider current and projected risks of heavy rains or severe droughts.
Through fiscal incentives, the initiative aims to increase the sales of electric vehicles to at least 6 percent of all passenger vehicles sold in the State by December 2026, compared to 4.3 percent in 2023. This will improve Bahia's vehicle fleet and its emissions performance, helping to reduce local air pollution and the transport sector's impact on public health. The tax exemption for electric vehicles will help boost local automotive industry, employment, and economic development, given the concurrent establishment of electric vehicle production in the Salvador Metropolitan Region.
Additionally, the new loan includes measures to promote cycling, which will especially benefit women's mobility by providing a safe, efficient, and affordable alternative to walking and private motorized modes. At least 1,000 women will be trained in the use of bicycles by June 2027, with a focus on Afro-Brazilian women. This effort will help them access jobs and services.
On the energy front, a key element of the program is positioning Bahia as a leader in low-carbon hydrogen production, in Brazil. By June 2027, the program aims to support the State in providing environmental licenses to at least four low-carbon hydrogen developers. These measures are expected to catalyze substantial private investments in low-carbon fuels, including green hydrogen and low-carbon biofuels.
The program will provide technical support to rural farmers in the semi-arid regions of Bahia to enter the clean fuels value chain, with a focus on female-led farms. This initiative will enable them to develop new sources of income and stimulate inclusive economic growth. Additionally, the program will support the development of an investment plan to improve electricity services for 30,000 rural electricity customers by June 2027.
By June 2027, the program is expected to result in 43 MW of installed distributed solar photovoltaic technology on 161 public buildings in Bahia. This will lead to savings in public sector expenditures on electricity and reductions in GHG emissions. These measures will support Brazil's objectives to reach net zero emissions by 2050 and increase the efficiency of public expenditures.
"The Bahia State Sustainable Infrastructure Program represents a significant milestone in the state's journey towards sustainable development. By leveraging innovative technologies, Bahia is poised to become a model for other regions in Brazil and beyond," said Johannes Zutt, World Bank's Country Director for Brazil.
The Bahia State Sustainable Infrastructure Program aligns with the priorities identified by the Government of Bahia in its Multi-Year Plan (PPA) 2024-2027 and the Bahia Integrated Development Plan (PDI) 2035. These plans aim to improve the quality of life, economic competitiveness, environmental sustainability, and strategic management in the state.
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