Amazon Mega-Dam Deemed Unfeasible in Risk Scenario Analysis

Brasilia, Brazil - This week's announcement detailing the members of the consortium seeking to build the controversial Belo Monte Dam in the Brazilian Amazon reveals a striking lack of private sector participation. The 18-member Norte Energia consortium(1) is marked by the absence of key players in the country's dam-building industry. State-owned or state-controlled participation in the consortium totals 77.5 percent, dwarfing the role of private sector investors and reflecting concerns about the financial risks associated with the world's third-largest planned hydroelectric project.

The lack of private sector enthusiasm reflects a series of unanswered questions, including the dam's higher-than-projected construction costs and uncertain generating capacity, as well as doubts about costs stemming from mitigation of its massive social and environmental impacts. 

The federal government's willingness to use massive public subsidies and pension funds in a project of dubious economic viability has drawn sharp criticism in Brazil.  "Taxpayers and workers with investments in pension funds have no idea of the huge risks associated with Belo Monte.  The workers of Petrobras, Caixa Economica Federal, and Banco do Brasil are spending their retirement money to subsidize what private investors are afraid to touch," said Raul do Vale, spokesperson from  the Instituto Socioambiental.

An influential report entitled "Uncertainties in Amazon Hydropower Development: Risk Scenarios and Environmental Issues around the Belo Monte Dam" released in May by the Instituto Tecnológico de Aeronáutica in São Paulo and the Conservation Strategy Fund in California has fueled investor fears. The report found that there is only a 28 percent chance that the Belo Monte Dam would yield a positive rate of return over the first 50 years of its operation. The report's risk scenario analysis calculates a high likelihood of a loss for investors ranging between US$3 - 8 billion.

Questions over the inefficiency of Belo Monte, which will produce an average of only 39 percent of its 11,233 megawatt installed capacity due to seasonal fluctuations in the river's flow, indicate that the project's heavy financial risks could only be solved by building additional reservoirs upstream.  The risk scenario report concludes that "construction of Belo Monte now will lead to an entirely foreseeable - some would say planned - crisis, which will exert enormous pressure for the construction of new dams upstream of Belo Monte to store water and enable the dams' capacity to be fully used."  Critics have long maintained that Belo Monte is only the first of a series of planned dams on the Xingu.
 
Given uncertainties over the project's economic viability, the Brazilian government has announced a series of generous perks to lure investors, including subsidized loans, tax breaks and public-guaranteed insurance.  The National Development Bank, BNDES, has committed to finance up to 80 percent of Belo Monte's US$17 billion price tag, with interest rates of a mere 4 percent, a generous grace period and 30 years for repayment in what will be the largest loan in the bank's history.  The bank has already issued subsidized credit totaling  US$8 billion (R$14 billion) and 50 percent tax breaks over 10 years to increase the private sector's involvement in Belo Monte's auction on April 20th and to entice European turbine suppliers Alstom, Andritz, and Voith-Siemens in signing with the consortium.  BNDES has repeatedly been charged with having weak social and environmental safeguards, a lack of transparency in lending decisions, and deficient public oversight mechanisms.

"Belo Monte and other mega-dams in the Amazon are not necessary.  Studies have shown that by investing in energy efficiency and alternative sources of energy, Brazil could avoid the need for huge dams in the Amazon and save billions in the process," said Brent Millikan, Amazon Program Director at International Rivers. "This project is a government handout to large construction and energy companies, several of which are major funders of political campaigns, at the expense of the Brazilian taxpayer, indigenous people, riverbank dwellers, small farmers and the Xingu River's incredible biodiversity."

Note

(1)    Norte Energia is dominated by the state-led electric utility Eletrobras, with a 49.98% stake divided among itself (15%) and regional subsidiaries Eletronorte (19.98%) and Chesf (15%).  Pension funds of government banks and other state-owned entities will hold an impressive 25% stake in the consortium, including the Petros fund of Petrobras employees (10%), the funds Funcef (2.5%) and Caixa FI Cevix (2.5%) pertaining to Caixa Econômica Federal employees, and finance from Bolzano Participações (10%), which draws on the Previ fund of Banco do Brasil employees, as well as investments from Spanish electric utility Iberdrola.   Such government-led participation, totaling 77.5%, dwarfs the role of private sector investors in the consortium, such as regional pig iron producer Sinobras (1%) and energy company Gaia Energia e Participações of Grupo Bertin (9%), the leading player in the Brazilian Amazon's beef industry.
 

The auction scheduled for April 20, when contracts for the construction of the Belo Monte dam and power plant were to be awarded has been suspended by a federal court in the city of Altamira, Pará.

A judge issued an injunction based on two lawsuits filed by government attrorneys (Ministério Públic Federal – MPF), which argued that the construction violates environmental legislation in a number of ways.

The decision can be appealed by the government at a federal court in Brasilia.

Fonte: AGBR
Autor: AGBR
 

World's Third Largest Dam Project Would Devastate Vast Area of Amazon Rainforest
 
Environmentalists, indigenous people, and social movements in Brazil condemned today's preliminary environmental license issued by the Brazilian environmental agency IBAMA for the Belo Monte Hydroelectric Dam. Belo Monte, which would be the world's third largest hydroelectric project, would divert the flow of the Xingu River and devastate an extensive area of the Brazilian rainforest, threatening the survival of indigenous peoples.

Belo Monte is the largest project of the Lula government's Plan to Accelerate Growth (PAC). The government says it plans to offer Belo Monte to private investors at an auction in April, and that construction would begin in late 2010. The project is one of more than 100 large dams being planned in the Amazon, many of which would threaten indigenous lands and protected areas.

IBAMA had stalled on issuing the environmental license for almost 3 months due to concerns about the huge impact zone of the project and the number of migrants that would move to Altamira in search of work. Two senior IBAMA officials resigned last November after complaining that they had been subjected to political pressure to approve the license.

The Catholic Bishop of the Xingu Prelacy, Dom Erwin Kräutler, who met with President Lula to discuss the project in July 2009, says "The government is trying to steamroll this project, which would have unforeseen and irreversible consequences, despite the fact that the President promised us he would review the project and said he would 'not shove it down anyone's throat'. One-third of the city of Altamira would be underwater and nobody knows yet where those 20,000 people would go, in addition to the riverbank populations and those who would be impacted by the drying of the Xingu's tributaries."
Indigenous people have been fighting against the project for more than 20 years. Megaron Tuxucumarrãe, a Kayapó chief, says "We want to make sure that Belo Monte does not destroy the ecosystems and the biodiversity that we have taken care of for millennia. We are opposed to dams on the Xingu, and will fight to protect our river."

Independent investigations have found that project studies underestimate the extent of Belo Monte's potential impacts.

Francisco Hernandez, an electrical engineer and co-coordinator of a group of 40 specialists who analyzed the project says, "Belo Monte is a project of doubtful engineering viability, an extremely complex project which would depend on the construction not only of one dam, but rather a series of large dams and dykes that would interrupt the flow of water courses over an enormous area, requiring excavation of earth and rocks on the scale of that carried out for digging the Panama Canal." Belo Monte would generate little energy during the three to four-month low water period, "which does not justify an investment estimated at between US$12.3 and $17.5 billion".
"No one knows the true cost of Belo Monte," said Aviva Imhof, International Rivers Campaigns Director. "The project would displace tens of thousands of people, and destroy the livelihood of thousands more. Even as Brazil argues that the international community should support rainforest protection, its government insists on promoting mega-infrastructure projects in Amazonia that are socially and environmentally indefensible."

Federal Attorneys have filed suit to force the government to hold additional public hearings to discuss the project's impacts, and further legal challenges to the project are likely.

While the Brazilian National Development Bank will finance a significant portion of the project's massive cost, project developers will need to seek a substantial amount of private financing. "Considering the enormous financial, legal and reputational risks, it would be imprudent to invest in this project," says Roland Widmer, Coordinator of the Eco-Finance Program of Amigos da Terra - Amazonia Brasileira.

Local groups in Pará will be holding protests this week against the decision. Antonia Melo, of the Xingu Forever Alive Movement says "Those promoting Belo Monte are predators trying to take away our life's blood, which is the Xingu River. We will continue to fight this project with all our might."

Further information: http://www.internationalrivers.org/node/4729

Press contacts:

Renata Pinheiro, Movimento Xingu Vivo para Sempre (Xingu Forever Alive Movement), Tel: +55 93 3515 2406, Cell: +55 93 9172 9776,     Este endereço de e-mail está protegido contra spam bots, pelo que o Javascript terá de estar activado para poder visualizar o endereço de email

Antonia Melo, Movimento Xingu Vivo para Sempre, Tel: +55 93 3515 2406, Este endereço de e-mail está protegido contra spam bots, pelo que o Javascript terá de estar activado para poder visualizar o endereço de email

Megaron Txucumarrãe, Tel: +55 66 3541 2011, Cell: +55 66 9618 5240

Francisco Hernandez, Cell: +55 19 9646 8743, Este endereço de e-mail está protegido contra spam bots, pelo que o Javascript terá de estar activado para poder visualizar o endereço de email

Bishop Dom Erwin Kräutler, Cell: +55 61 96499231, Este endereço de e-mail está protegido contra spam bots, pelo que o Javascript terá de estar activado para poder visualizar o endereço de email

International Rivers is an environmental and human rights organization with staff in four continents. For over two decades, International Rivers has been at the heart of the global struggle to protect rivers and the rights of communities that depend on them.

 
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Por Luisa Fernanda López

Os esforços da Bolívia para conseguir a despenalização do consumo tradicional da folha de coca perecem surtir efeito na comunidade internacional.

O chamado do presidente boliviano, Evo Morales, no mês de março, durante a Conferência das Nações Unidas sobre Entorpecentes, para que se despenalizasse a mastigação da folha de coca, parece ter surtido efeito. Há poucos dias, os 154 países membros do Conselho Econômico e Social da ONU decidiram por consenso geral iniciar o processo de consultas sobre a proposta boliviana de despenalizar ‘el akullico’, a mastigação da folha de coca.

Para Angélica Navarro, embaixadora da Bolívia nas Nações Unidas, esta é uma consequência lógica dos atuais desenvolvimentos jurídicos internacionais sobre povos indígenas, que fazem com que especificidades culturais, hoje em dia, sejam mais reconhecidas. Portanto, Navarro considera natural que uma convenção firmada em 1961, sem a consulta dos povos indígenas, seja modificada de acordo com o direito internacional.

Os mitos da coca

Para a embaixadora boliviana, a grande maioria dos preconceitos e questionamentos em torno do consumo da folha de coca provêm da falta de conhecimento. “Apenas o fato de que em inglês não exista uma diferenciação entre a folha de coca e o produto entorpecente - a cocaína -, gera, por si só, confusões. Ambos se definem como ‘coca’, algo que não se dá no idioma espanhol”, explica a diplomata.

Em sua publicação 'Los mitos de la coca', o Instituto Transnacional de Amsterdã assinala que “nos polêmicos debates sobre esta planta expressam-se visões e opiniões radicalmente contrárias, e quem não está familiarizado com o tema se perde com facilidade no labirinto de aparentes contradições. Para alguns, a folha de coca causa tanta dependência como seu derivado mais conhecido, a cocaína; outros afirmam que pode curar metade das enfermidades dos tempos modernos. Para alguns, o cultivo de coca é a principal causa de degradação ambiental de certas regiões; outros afirmam que a coca ajuda a proteger o solo e impede a erosão”.

Se depois destes 18 meses não se chegar a um total consenso, a Assembleia Geral do Conselho Econômico e Social da ONU convocará uma conferência internacional para tratar do tema.


Fonte: Pressenza