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Brazil's Sabesp nears sewage, water contract with major city

SAO PAULO, Sept 21 (Reuters) - Brazil's Cia de Saneamento Basico do Estado de Sao Paulo SA has signed a letter of intent to provide water and sewage services to the city of Guarulhos, home to more than 1.3 million people, the sewage and water company said in a securities filing on Thursday night.

Under the terms of the proposed contract, Sabesp, as the company is commonly known, will invest 1.7 billion reais ($417 million) and exempt the municipality from 3.2 billion reais in debt.

The project still must be approved by city legislators and other lawmakers, said the company, which expects a contract to be signed within 90 days.

Guarulhos, adjacent to the city of Sao Paulo, is the site of Latin America's busiest airport.

($1 = 4.08 reais)

(Reporting by Gram Slattery; Editing by Steve Orlofsky)