Forestry Investment Blog

Ok so this isn’t strictly related to forestry but let’s face it, this is interesting!

The ongoing saga of the new Amazon dam has finally come to an end with President Luiz Lula da Silva signing the contract for the Belo Monte dam with the Norte Energia consortium.

The 11,000 MW dam will become the world’s third largest after the Three Gorges in China and Itaipu, which is jointly run by Brazil and Paraguay. The government gave their approval saying that the dam is crucial for development and will create jobs.

Critics however say that the 6km-long (3.75-mile) long dam will make roughly 50,000 indigenous people homeless and cause irreparable damage to the local ecosystem.

“The government has signed a death warrant for the Xingu river and condemned thousands of residents to expulsion,” local Indian leaders said on Thursday.

In the soap opera that surrounded this project bidding for the project had to be suspended three times until a final court appeal by the Brazilian government awarded the contract to Norte Energia (led by the state owned Companhia Hidro Eletrica do Sao Francisco).

After signing the contract President Lula admitted that he himself had been against the dam before he knew more about it
“You cannot imagine how many times I spoke against Belo Monte without even knowing what it was about and it is precisely during my government that Belo Monte is being unveiled,” he said. “I think this is a victory for Brazil’s energy sector. We will persuade them that we took seriously into account the environmental and social issues,” he added.

The saga that is the building of the Belo Monte dam has been going on for years. The project was initially abandoned in the 1990s amid widespread protests both in Brazil and in the rest of the world. However, officials have dismissed the criticism and as a consolation have promised that Norte Energia will pay $800 million to protect the environment.

Already the dam is expected to cost between $11 billion and $17 billion and is estimated to provide electricity for 23 million homes. In response to this claim critics say that the Belo Monte dam will be hugely inefficient and will generate less than 10% of its capacity during the three to four months of the year when the water levels are low.

Government ministers have hit back at this saying that hydro-electric plants are a vital way to ensure power supplies over the next decade and as the Brazilian economy is continuing to show signs of growth at least 70 dams are said to be planned for the Amazon region.

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This entry was posted on Friday, September 3rd, 2010 at 1:05 PM and is filed under Brazil, Forestry Investment. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.