Brazil - Fortaleza Urban and Fiscal Sustainability Development Policy Loan Project

Overview & Synopsis

The development objective of the Fortaleza Urban and Fiscal Sustainability Development Policy Loan for Brazil is to promote urban and fiscal sustainability in the municipality of Fortaleza. The operation supports policy and institutional reforms in two areas of work: first, strengthening fiscal sustainability through modernization of the urban property tax cadaster and valuation to increase property tax revenues, revision of the street lighting fee structure to enhance cost recovery and enable investment in public lighting and security surveillance while incentivizing energy efficiency, and automatic expenditure control measures tied to the current savings indicator to safeguard fiscal discipline; and second, promoting sustainable urban development by updating the Master Plan and zoning to foster compact, transit-oriented growth, expand environmental protection areas, and reserve well-located land for social housing, strengthening climate governance via the Office of Climate Governance and a permanent Climate Risk Observatory, and reforming the municipal urban development fund to diversify resources and establish a minimum allocation for social housing. The project intends to improve revenue mobilization and the current savings ratio, raise public lighting service revenue and crowd in private capital for lighting and traffic systems, expand landscapes under enhanced conservation, increase land reserved for social housing, accelerate tree planting in heat hot spots to reduce surface temperatures, and deliver tangible upgrades in housing quality and secure land tenure, including land titles with a significant share issued to women. The reforms are aligned with the Country Partnership Framework and the Paris Agreement, and implementation will be monitored by the municipal finance and urban environment secretariats.