The Project will constitute the Phase 1 of the Multiphase Programmatic Approach (MPA) 'Integrated Water Security Program for the Northeast of Brazil'. Most of the region's nine states face similar constraints, including limited water availability, recurrent droughts and floods, fragmented institutions, and underdeveloped infrastructure and management tools-- further shaped by transboundary watersheds and aquifers, as well as shared hydraulic infrastructure. These commonalities present a valuable opportunity for horizontal learning and collaboration, enabling states to exchange knowledge and build on each other's innovations and good practices. Several states have already developed effective solutions that are highly relevant and replicable across the region. The MPA will facilitate structured knowledge exchange and coordination across the states, helping reduce negative externalities and enhance the collective impact of water security investments. About 7.3 percent of the Northeast Region's population lives in the State of Paraiba; within Paraiba, 77.6 are urban residents and 22.4 percent live in rural areas (IBGE, 2022). The state's water security challenges and socioeconomic landscape present a great opportunity to test and refine the Program's strategies. Phase 1 of the MPA comprises activities prioritized by the State Government aimed at improving water security across Paraiba, strengthening key sector water institutions such as the State Water Resources Management Executive Agency (Agencia Executiva de Gestao das Aguas, AESA), the State Water and Sanitation Company (Companhia de Agua e Esgotos da Paraiba, CAGEPA), and a newly created Executive Management Unit for Rural Sanitation (Gerencia Executiva de Saneamento Rural, GESR), and constructing essential infrastructure such as a wastewater treatment plant (WWTP), the sectorization of the water supply distribution system to reduce non-revenue water (NRW), and the construction of a water transmission main for the Gramame system, all serving the RMJP. The Project builds on lessons from the ongoing Paraiba Improving Water Resources Management and Services Provision Project (Projeto de Seguranca Hidrica or PSH by its acronym in Portuguese), approved in 2019. PSH includes construction of water mains to transfer water from the Sao Francisco River's Integration Project to 27 municipalities in the regions in Agreste and Borborema, automation and partial sectorization of RMJP's water network to reduce NRW, improvements in wastewater collection for energy efficiency, and institutional strengthening of CAGEPA. . The Project will include the following components:Component 1. Foundations for Water Security. This component aims to contribute to proactive WRM in the state by strengthening the state WRM institution (AESA) and consolidating key management instruments related to water quantity, quality, and drought resilience. It will focus on expanding surface and groundwater monitoring, fostering dialogue on the costs and financial sustainability of the water management system, improving water licenses and charges, and establishing water quality standards through a participatory process with society, along with the necessary actions to achieve those standards. The component will also focus on increasing the state's capacity for drought management through increased monitoring and warning mechanisms for implementation of adequate measures, and the proposition of a state water reuse policy.Component 2. Resilient Water Services. This component is designed to advance the modernization and expansion of WSS, supporting the state water utility (CAGEPA), the state regulatory agency (ARPB), and a recently created unit that will lead the development of a strategy and plan to support rural water supply and sanitation in the state, the Gerencia Executiva de Saneamento Rural (GESR). It also includes the construction and equipment of water infrastructure that will enhance the quality of life for residents, improve environmental outcomes, and promote economic growth in the metropolitan region of Joao Pessoa. It includes the following subcomponents: (2.1) Expansion of the water supply system in RJMP, this subcomponent will fund the construction of a transmission main connected to the Gramame System; the water supply system includes three existing dams, two of them interconnected and classified as large dams, Gramame and Mamuaba dams; (2.2) Reduction of water losses in RJMP, this subcomponent involves constructing and optimizing selected water supply network sectors to reduce physical water losses in the CAGEPA's distribution network in the RMJP; (2.3) Expansion and modernization of the WWTP in RMJP, this subcomponent comprises civil works and acquisition of equipment to improve and expand wastewater treatment services in the RMJP under a design-and-build contract; (2.4) Support to the Regulatory Agency of Paraiba State, this subcomponent will fund technical assistance and training to strengthen ARPB's institutional capacity and regulatory effectiveness; and (2.5) Rural Sanitation, which will provide technical assistance to SEIRH for the improvement of management models for the operation and maintenance of WSS services in the state. Component 3. Partnership for Water Security and Project Management. This component will fund knowledge sharing and learning activities between the Borrower and other States in areas of interest for dissemination of best practices including, inter alia, institutional capacity for WRM, data use and information systems, sustainable management models for rural WSS, and NRW control solutions. The component will also provide support to strengthening the technical and administrative capacity of the PMU with respect to technical, financial management, audit, procurement, monitoring and evaluation, social and environmental, and communication and information technology activities, including through the hiring of consultants. Activities will include the provision of independent audit services.

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