Mexico: CONAGUA adopts a new stimulus scheme to boost the efficiency and infrastructure of water and sanitation services

Mexico · Planning, Zoning and Evironment1Mexico: CONAGUA adopts a new stimulus scheme toboost the efficiency and infrastructure of water andsanitation servicesMarch 10, 2026The new Water and Sanitation Stimulus Program (PEAS), operated by the National WaterCommission (CONAGUA), establishes the mechanisms so that drinking water andsanitation service providers can access the refund of the fees paid for the extraction anddischarge of national water, with the purpose of strengthening the water infrastructure andimproving the coverage of services in the country.On March 3, 2026, the Ministry of Environment and Natural Resources (SEMARNAT) published in theOfficial Gazette of the Federation the guidelines for the operation of the Water and Sanitation StimulusProgram (PEAS), within the U001 Budget Program for the Return of Drinking Water and WastewaterRights. These guidelines represent the merger of the previous Duty Refund Program (PRODDER) andWastewater Sanitation Program (PROSANEAR) programs into a single instrument effective as of fiscalyear 2026.Regulatory framework and objectivesCONAGUA issues these guidelines based on the National Water Law, the Federal Law of Rights, andthe Federal Law of Budget and Financial Responsibility.The general objective of the program is that drinking water and sanitation service providers have theinstitutional, technical, and financial capacities to guarantee quality and continuity services to thepopulation. Specific objectives are to improve access to drinking water services and increase municipalwastewater treatment coverage.The program is aligned with the National Development Plan 2025-2030, which establishes the purposeof guaranteeing the human right to water through equitable distribution and the development ofinfrastructure that brings drinking water to all communities. It also responds to Mexico's commitmentsto the 2030 Agenda for Sustainable Development, particularly goal 6 on clean water and sanitation.Program structureThe program operates through two clearly differentiated support strands:Mexico · Planning, Zoning and Evironment2 Aspect A: refund of the payment of fees for the extraction, use and exploitation of national watersto carry out actions to improve efficiency and infrastructure of drinking water, sewerage andwastewater treatment, based on Article 231-A of the Federal Law of Rights. Aspect B: refund of the payment of fees for wastewater discharges to carry out infrastructureactions, operation and improvement of sanitation efficiency, based on Article 279 of the FederalLaw of Rights.Target populationThe following may participate in the program: (a) states, municipalities, and parastatal or paramunicipalorganizations that, through assignment titles, use national waters and pay the corresponding fees; (b)concessionaire companies that provide drinking water service in substitution of such entities; (c)neighborhoods constituted as legal entities with concession titles for the supply of drinking water; and(d) entities and concessionaire companies that provide the sewerage and sanitation service and aretaxpayers of the right for wastewater discharges.Types of supportThe support in slope A includes: (i) drinking water infrastructure, including construction, expansion andrehabilitation of catchment works, pipelines, water treatment plants, regulation tanks and distributionnetworks; (ii) sewerage and wastewater treatment infrastructure; and (iii) efficiency improvement,including network sectorization, macro and micrometering, leak detection, commercial system, videoinspection equipment, alternative energies, studies and projects, water disinfection and purification, andtechnical training.Support in pillar B includes: (i) sanitation infrastructure, including the construction and expansion ofinfrastructure for the collection, conduction, sanitation, reuse and disposal of wastewater, as well as theproduction and capture of biogas and cogeneration of electricity; and (ii) improvement of sanitationefficiency through infrastructure rehabilitation and procurement to increase efficiency.Support and counterpart amounts Aspect A: federal resources may be up to the entire amount of the rights covered, not exceeding50% of the total amount of the Action Program. Matching resources must be at least equal to thefederal contribution and may not come from another federal grant program. It is allowed to allocateup to 30% of federal resources for electricity consumption in the operation of hydraulicinfrastructure; up to 30% for disinfection and purification actions; up to 3% for technical andregulatory supervision; and up to 2% for technical training. Aspect B: federal resources may be up to the entire amount of the rights covered. The counterpartof the service provider is determined according to the number of inhabitants of the locality served,according to the following table:Population Range Proportion of investment by the SPEqual to or greater than 500,000 inhabitants 100%From 100,000 to 499,999 inhabitants 60%From 15,000 to 99,999 inhabitants 30%From 10,001 to 14,999 inhabitants 0%Mexico · Planning, Zoning and Evironment3Population Range Proportion of investment by the SPFrom 2,501 to 10,000 inhabitants 0% (same ratio as 10,001-14,999)Participation requirementsTo join the program, service providers must submit: (1) application for membership, (2) list of shares,(3) proof of updated tax situation with issuance not exceeding three months, (4) technical file of theshares, (5) letter of statement under oath of telling the truth of the mechanism for the installation ofacquisitions, (6) questionnaire of basic information, and (7) letter of manifestation of commitments infiscal matters.Eligibility criteriaIn addition to meeting the requirements, for the allocation of resources, applicants must: (i) submit thedocumentation in the formats and deadlines indicated; (ii) make the payments of fees in accordancewith the Federal Law of Rights; (iii) not having debts or non-compliance with the program of previousyears; and (iv) to have a comprehensive municipal plan for drinking water, sewage, sanitation and floodprevention for state and municipal public institutions.Application procedure and deadlinesThe service provider must submit the application for membership within 60 calendar days after thedate of publication of the guidelines.The responsible unit will verify compliance with the requirements and issue the opinion of origin,formalizing the Action Program. The payments of rights that would be assigned correspond to thosemade by the PS until November 15 of the fiscal year.In case modifications are required, the service provider may submit the Modifying Action Program nolater than the last business day of September of the corresponding fiscal year.Obligations of beneficiariesAmong the main obligations of the service providers are: (a) to issue CFDI for each filing of resources,(b) to submit quarterly progress reports, (c) to present the fiscal close of the fiscal year no later than thelast business day of January of the following fiscal year, (d) to present the closing of the program'sactions within 30 calendar days at the end of the agreed calendar, (e) to return to the Treasury of theFederation (TESOFE) the unverified or unexercised resources together with their financial burdens and(f) to label the works and infrastructure financed with resources of the program.Annual physical goalsComponent GoalDrinking water - inhabitants served 3,250,000Drinking water - efficiency improvement actions 4,000Sewerage - inhabitants served 3,000,000Mexico · Planning, Zoning and Evironment4Component GoalSewerage - efficiency improvement actions 800Sanitation - efficiency improvement actions in WWTPs 250Relevant transitional provisions The guidelines came into force as of their publication in the Official Gazette of the Federation. The instructions for PROSANEAR published on May 31, 2018 and the PRODDER guidelinespublished on October 20, 2016 are repealed. Applications submitted in fiscal year 2026 prior to the publication of the guidelines may beconsidered to participate, and the notified observations must be resolved within a period of no morethan 45 calendar days. For the allocation of program resources, service providers must not have debts or non-compliancesfrom PRODDER and PROSANEAR in force until fiscal year 2025.This publication contains general information and does not constitute a professional opinion or legal advice.© J&A Garrigues, S.L.P., all rights reserved. This work may not be used, reproduced, distributed, publicly communicated oraltered, in whole or in part, without the written permission of J&A Garrigues, S.L.P.Georgina Gutiérrez [email protected]é Enrique Cruz LozanoSenior [email protected] de las Palmas 525, Piso 6Col. Lomas de Chapultepec, Ciudad de México, 11000 (Mexico)T +52 55 1102 3570Torre Novo Piso 4 Desp. 401, José Clemente Orozco 335,Col. Valle Oriente, San Pedro Garza García, 66269 (Mexico)T +52 81 8153 3900Av. Antea 1090 Piso 2 Int 206, Col. Jurica,Querétaro, 76100 (Mexico)T +52 442 296 6400Follow us on: [email protected] information:Planning, Zoning and Environment