HidroAysén - owned by European company Endesa and Chilean company Colbun - plans to dam two of Chile's most powerful and pristine rivers, the Baker and Pascua Rivers. Electricity from these dams would be sent more than 2,400 kilometers north to serve Chile's biggest cities and its mammoth copper industry. The transmission lines for the project would require one of the world's longest clearcuts--much of it through untouched temperate rainforests of a type found nowhere else on the planet outside Patagonia.

The five dams (two on the Baker and three on the Pascua) would displace families, disrupt livelihoods and spoil tourism that brings local income. Transmission lines and reservoirs would destroy temperate rainforests unique to Patagonia. Victims of these dams would include critically endangered species such as the huemul deer, a Chilean national symbol. In response to the dam plans, Chilean and international NGOs have teamed up to wage the biggest environmental campaign in Chile's history: a campaign to keep Patagonia free of dams.

In June 2010, HidroAysén has requested and been granted another suspension in the review of the project’s environmental impact analysis (EIA). The company has now officially requested to have until the end of October 2010 to finish preparing their responses to the more than one-thousand comments made on their last addendum to the EIA for the dams.

In the beginning of 2010 BBVA announced that they are not considering financing the HidroAysen project due to its high social and environmental risks.

The HidroAysén project remains in the process of environmental review. The company submitted its Environmental Impact Assessment in 2008. Chilean public agencies provided more than 3000 comments that the company was asked to address. In response, in October 2009 the company submitted an Addenda to their Environmental Impact Study. With just 15 days to review the 5000-page Addenda, 29 of the 32 public agencies again found it insufficient, with 14 of the agencies making highly critical comments. As a result, in January 2010 the Chilean regulatory authority provided another 1000 observations on the Addenda, and asked HidroAysén to respond. HidroAysén has asked for another 6-month extension to prepare their response.  The environmental review of HidroAysén is suspended until the end of June 2010.

In November of 2008, despite thousands of comments from the Chilean public voicing opposition to the proposal and the recommendation of many Chilean public service agencies for outright rejection of the clearly insufficient Environmental Impact Study due to technical deficiencies, the proposal was returned to the company for revision without actual denial of the proposal. HidroAysén has been given at least 9 months to respond to comments and to revise their proposal.

The original EIA (environmental impact assessment) was considered particularly weak due to the lack of contemporary environmental impact methodology and modeling, the flat out evasion of key social and environmental impact topics, and the fragmentation of the project into smaller parts, most notably the separation of the EIA for the more than 2000 kilometers of transmission lines from the EIA of the 5 proposed dams. The evasion of a real assessment of total cumulative impacts of the project proposal reflects HidroAysén's disinterest in providing for a true evaluation of the impacts of the proposed mega-project, as well as raising important questions of good governance, transparency, and free and fair access to environmental information.

HidroAysén continues to invest what observers estimate to be millions of dollars in a high-end public relations campaign designed to manage their image in Patagonia and in Chile as a whole in an effort to mitigate the tremendously negative and controversial image that the proposal has in Chile and internationally.

The eruption of the Chaitén volcano in 2008, demonstrated the extreme volatility of the landscapes through which the transmission lines would have to be constructed. The entire town or Chaitén was destroyed, and is now slated for reconstruction in a new locale. The EIA of HidroAysén did nothing to take into account seismic or volcanic activity. As well, a series of dramatic climatic events on the Río Baker over the past year, including a number of Glacial Lake Outburst Floods, have resulted in sudden changes in river volume and temperature that exceeded any modeling embarked upon by the company, demonstrating their complete lack of preparedness in understanding the environmental and climatic conditions of the extremely sensitive and wild region in which they propose to develop this project.