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Risk Management (Tables)
 12 Months Ended
Dec. 31, 2022
Risk Management  
Schedule of exposure to exchange risk
                    
   December 31, 2022  December 31, 2021
   Foreign currency (in thousands)  R$  Foreign currency (in thousands)  R$
             
Borrowings and financing – US$   191,022    996,695    163,538    912,624 
Borrowings and financing – Yen   45,369,189    1,795,259    49,324,813    2,390,774 
Interest and charges from borrowings and financing – US$        6,985         4,121 
Interest and charges from borrowings and financing – Yen        10,502         13,970 
Total exposure        2,809,441         3,321,489 
Borrowing cost – US$        (31,037)        (22,486)
Borrowing cost – Yen        (2,646)        (2,850)
Total foreign-currency denominated borrowings (Note 17)        2,775,758         3,296,153 
The table below shows the exchange rate variation for the period
                 
      

December 31, 2022

    

December 31, 2021

    

Variation

 
 US$    R$ 5.2177    R$ 5.5805    -6.5%
 Iene    R$ 0.03957    R$ 0.04847    -18.4%
The Company understands that the scenario presented is reasonable, given the instability of the Brazilian real against the U.S. dollar and the Yen
      
   Scenario I (Probable)
   (*)
Net currency exposure as of December 31, 2022 in US$ - Liabilities   191,022 
      
US$ rate as of December 31, 2022   5.2177 
Exchange rate estimated according to the scenario   5.2700 
Difference between the rates   (0.0523)
      
Effect on the net financial result R$ - gain/(loss)   (9,990)
      
Net currency exposure as of December 31, 2022 in Yen - Liabilities   45,369,189 
      
Yen rate as of December 31, 2022   0.03957 
Exchange rate estimated according to the scenario   0.04203 
Difference between the rates   (0.00246)
      
Effect on the net financial result R$ - gain/(loss)   (111,608)
      
Total effect on the net financial result in R$ - gain/(loss)   (121,598)
      
(*) For the probable scenario in U.S. dollars and Yen, the exchange rates estimated for December 31, 2023, were used, according to the Focus-BACEN and B3's Benchmark Rate report, of December 31, 2022, respectively.
The table below provides the Company's borrowings and financing subject to variable interest rates
          
    

December 31, 2022

    

December 31, 2021

 
CDI(i)   9,251,150    7,612,299 
TR(ii)   1,635,587    1,638,079 
IPCA(iii)   3,073,435    3,019,459 
TJLP(iv)   1,433,029    1,478,740 
SOFR(v)   996,697    912,626 
Interest and charges   424,856    243,696 
Total   16,814,754    14,904,899 

 

(i) CDI – (Certificado de Depósito Interbancário), an interbank deposit certificate
(ii) TR – Interest Benchmark Rate
(iii) IPCA – (Índice Nacional de Preços ao Consumidor Amplo), a consumer price index
(iv) TJLP – (Taxa de Juros a Longo Prazo), a long-term interest rate index
(v) SOFR – Secured Overnight Financing Rate
Schedule of internal policy of market risk management
     

Banks

Fitch

Moody's

Standard Poor's

Banco do Brasil S/A AA(bra) AAA.br -
Banco Santander Brasil S/A - AAA.br brAAA
Brazilian Federal Savings Bank AA(bra) AAA.br brAAA
Banco Bradesco S/A AAA(bra) AAA.br brAAA
Itaú Unibanco Holding S/A AAA(bra) AAA.br -
Banco BV - AA.br brAAA
Banco BTG Pactual S/A AA(bra) AAA.br brAAA
The table below shows the rating assessment released by the Fitch agency, for deposit transactions and financial investments in local currency
          
   December 31, 2022  December 31, 2021
Cash and cash equivalents and financial investments          
AA(bra)   2,237,629    1,905,810 
AAA(bra)   1,011,685    970,474 
Other (*)   296,044    275,030 
    3,545,358    3,151,314 

 

(*) As of December 31, 2022, this category includes R$ 289,908 (R$ 262,465 as of December 31, 2021) referring to Banco BV, current accounts, and financial investments, which are not rated by Fitch.
For agreements with floating interest rate, the interest rates used correspond to the base dates above.
                                   
   2022  2023  2024  2025  2026  2027 onwards  Total
As of December 31, 2022                     
                      
Liabilities                                   
Borrowings and financing   3,640,245    3,740,510    3,790,915    3,503,169    3,821,448    13,422,829    31,919,116 
Trade payables and contractors   430,946    —      —      —      —      —      430,946 
Services payable   723,242    —      —      —      —      —      723,242 
Public-Private Partnership – PPP   517,681    423,568    386,767    386,767    386,767    3,733,287    5,834,837 
Program Contract Commitments   100,022    1,174    1,174    1,174    1,174    12,352    117,070 
Total   5,412,136    4,165,252    4,178,856    3,891,110    4,209,389    17,168,468    39,025,211 
Schedule of estimates used in the measurement
   

December 31, 2022

Indicators

Exposure

Scenario I

(Probable)

     
Assets    
CDI 1,689,876 13.4200%(**)
Financial income   226,781
     
Liabilities    
CDI (9,251,150) 13.4200%(**)
Interest to be incurred   (1,241,504)
 
 
 
CDI net exposure (7,561,274) (1,014,723)
     
Liabilities    
TR (1,635,587) 0.0205%(**)
Expenses to be incurred   (335)
     
IPCA (3,073,435) 5.3128%(*)
Expenses to be incurred   (163,285)
     
TJLP (1,433,029) 7.2000%(*)
Interest to be incurred   (103,178)
     
SOFR (***) (996,697) 0.0491%(**)
Interest to be incurred   (489)
   
 
Total expenses to be incurred, net  

(1,282,010)

     
(*)  Source: Focus-BACEN Report of December 31, 2022
(**) Source: B3 of December 31, 2022
(***) Source: Bloomberg
Total capital is calculated as total equity as shown in the statement of the financial position plus net debt
          
   December 31, 2022  December 31, 2021
       
Total borrowings and financing (Note 17)   18,958,671    17,723,836 
(-) Cash and cash equivalents (Note 7)   (1,867,485)   (717,929)
(-) Financial investments (Note 8)   (1,677,873)   (2,433,385)
           
Net debt   15,413,313    14,572,522 
Total equity   27,333,533    24,931,859 
           
Total capital (shareholders + providers of capital)   42,746,846    39,504,381 
           
Leverage ratio   36%   37%
The estimated fair values of the financial instruments are as follows
                    
   December 31, 2022  December 31, 2021
   Carrying amount  Fair value  Carrying amount  Fair value
Cash and cash equivalents   1,867,485    1,867,485    717,929    717,929 
Financial investments   1,677,873    1,677,873    2,433,385    2,433,385 
Restricted cash   37,474    37,474    28,467    28,467 
Trade receivables   3,277,808    3,277,808    2,918,311    2,918,311 
Water and Basic Sanitation National Agency – ANA   9,193    9,193    20,666    20,666 
Other assets   212,674    212,674    226,242    226,242 
Financial liabilities
                    
   December 31, 2022  December 31, 2021
   Carrying amount  Fair value  Carrying amount  Fair value
 Borrowings and financing   18,958,671    19,260,133    17,723,836    17,947,954 
Trade payables and contractors   430,946    430,946    236,763    236,763 
Services payable   723,242    723,242    469,027    469,027 
Program contract commitments   112,385    112,385    122,647    122,647 
Public-Private Partnership - PPP   2,959,181    2,959,181    3,060,185    3,060,185