Financialization and water crisis in São Paulo (2014–2015)

• Financialization reshaped São Paulo’s water governance and infrastructure. • Sabesp prioritized short-term profits over equitable water distribution. • Water became an asset through financial techniques of valuation and control. • Water scarcity became a vehicle for financial accumulation and inequality. • The São Paulo water crisis revealed tensions between public and financial logics. This study investigates how the financialization of water infrastructure reconfigured governance practices during the 2014–2015 water crisis in São Paulo, Brazil. While often framed as a governance failure, the crisis is analyzed here as a moment in which financial imperatives—such as revenue continuity, investor signaling, and dividend performance—were prioritized over equitable service provision. The research employs a qualitative case study approach, drawing on 37 elite interviews, official reports, and documentary analysis. Findings show that Sabesp, the state-owned water utility, deployed techniques such as regressive billing, tariff adjustments, and global dividend payouts to preserve financial credibility, even amid deepening scarcity. These instruments displaced the burden of crisis onto vulnerable populations while maintaining investor confidence. Framed through a spatial approach informed by Milton Santos and critical financialization literature, the study reveals how financial logics become embedded in infrastructure governance, generating new forms of socio-spatial inequality. Financialization thus emerges as a spatialized process of extractive governance.