A loan has been arranged with the Inter-American Development Bank (IDB) to help pay for the work, which will connect more than 350,000 homes to a sewage treatment plant. 

Currently, about 33 per cent of Rio's sewage is treated and this latest cash boost is part of a $2 billion (£1.3 million/€1.5 million) Environmental Sanitation Programme of Municipalities (PSAM) scheme.

The region around the bay is home to about 10 million people, and most of their sewage empties into the waters of Guanabara Bay.

The work will help the Rio State Government's plan to extend sewage treatment to 80 per cent of state residents before the Games in 2016.


The agreement is due to be formalised later today during the IDB annual meeting in the Uruguayan capital Montevideo, where Rio State Governor Sergio Cabral is to give a lecture on the number of major international events in Rio de Janeiro for the coming years, including the Olympics and the 2014 FIFA World Cup, and the growing investment opportunities there.

"This is another achievement for the people and environment of our State," said Cabral.

"The funds will be fundamental for us to complete the cleanup of Guanabara Bay and, finally, ensure basic sanitation to more than one-and-a-half million inhabitants of the towns surrounding the Bay of Guanabara."

Guanabara Bay, which is located on Rio's western shore but which is on the other side of Sugarloaf mountain from renowned beaches such as Copacabana, has always been well known in Rio for being polluted.

But things became even worse in 2000 when 1.3 million litres of oil leaked from an underwater pipeline Petrobras, the Brazilian company, smothering in oil birds, sandy beaches, and much of the mangrove swaps that surround the area.


When the World Military Games were held there last July, volunteers did a week of emergency cleanup, hauling out half-a-ton of floating trash so it would not ensnare a boat and cost an athlete a medal. 

This announcement is the latest initiative funded by international banks and supplemented with state funds to build waste treatment plants along Guanabara.

Much of the rotting food and other organic matter that had flowed unimpeded into the water was blocked by improvements to the Gramacho Municipal Landfill, one of the world's largest dumps, built on unstable, ecologically sensitive marshland bordering the bay.

Agreements with refineries and shipyards operating in the area have already significantly reduced the heavy metals and other industrial pollutants entering the system.

"The programme is emblematic of its significance because it represents an improvement of living conditions of much of the population of the State of Rio de Janeiro and because the benefits in terms of public health and improving social indicators, will be strongly impacted by the interventions in a region that is one of the main cards of Brazil," said Luis Alberto Moreno, the President of the IDB.

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