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Sunset at Madeira River
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last update: Feb 08, 2010
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printRio Madeira dam project - Brazil location
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Roland Widmer, Friends of the Earth Amazonia, Brazil working partners
Artur Moret, Rio Madeira Vivo, Brazil
![]() March against the Rio Madeira dam project.
sector
dams
description
Located in the state of Rondônia - Brazil, the Madeira River is the principal tributary of the Amazon River, with its basin covering about one-quarter of the Brazilian Amazon. The Madeira River project consists of two huge hydroelectric dams: Santo Antonio (projected cost US$ 4.35 billion, current estimate US$ 6.7 billion, installed generating capacity 3,150 MW) and Jirau (projected cost US$ 4.55 billion, installed capacity 3,300 MW). The construction of the project - plus two additional dams upstream - would, according to the project sponsors, open a 4,200 km industrial waterway for barge passage, permitting transport of soybeans, timber, and minerals to Atlantic and Pacific ports. In January 2007 the project was included in the Accelerated Growth Programme (PAC in Portuguese) - an ambitious Brazilian Federal Government plan to invest more than BRL 900 billion (US$400 billion) between 2007 and 2010, in more than 2000 infrastructure development projects. Since then, the Rio Madeira dam project has been pushed forward rapidly. current status (Sep 24, 2009)
Independent experts analyzing official project studies reported that due to sediment accumulation the flooded area may cover more than twice the 529 km2 indicated in the EIA, affecting protected areas and a forest reserve in neighboring Bolivia, and that impacts on migratory fish species may lead to their extinction. The Madeira dam projects have been the subject of official protests by the Bolivian government, and the country’s Environment Directorate is now coordinating a process to analyze the EIA. brief history
The preliminary license for Santo Antonio and Jirau was granted by
the environmental agency, IBAMA, on July 9th, 2007, with 33 conditions
with which the dam builders must comply. This license is subject to
litigation, since it failed to consider the impacts of transmission
lines, public hearings did
not comply with the law (and, for that matter, the Equator Principles)
and the license was granted over the objections of IBAMA's technical
staff. Legal challenges are currently awaiting judgement by the courts. So far, eight civil legal actions were filed against the Santo Antonio and Jirau projects. They have the potential to delay or halt the projects. The consortiums responsible for the construction of the Santo Antonio and Jirau dams were fined three times for environmental damage (total volume of fines in excess of R$ 9 million) including a 11-ton fish kill and illegal deforestation for the work site. Moreover, in September 2009, employees were found working in irregular conditions in a construction site related to Jirau’s hydroelectric plant. Still, workers went on strike to ask for better payment and working conditions. Kanindé Ethno-environmental Defense Association has accused the
hydro plants on the Madeira River of violation of indigenous rights at
the Latin-American Water Tribunal (TLA), an independent international
environmental court established in 1988 in order to provide a venue for
traditional communities to be heard in conflicts involving water. The
TLA resolved to censor the Brazilian government on three accounts: companies involved
Santo Antonio dam A consortium led by the Brazilian group Odebrecht (holding with businesses in engireering & construction, petrochemicals and public concessions) and the state-owned power generator Furnas won an auction realized by the electricity regulator in December 2007. The equity composition of the winning consortium - Madeira Energia (a SPV - Special Purpose Vehicle) is as follows:
In April 2009, FI FGTS also acquired private debentures of MESA for R$ 1.5 billion. Banco Santander used to have 5% of the consortium through their stake in the FIP Amazônia Energy Investment Fund. They sold their participation to FI-FGTS on January 14th, 2010. In the case of Santo Antonio, Alstom, Va Tech and Voith Siemens have already signed contracts with Odebrecht to provide turbines and other equipment. Consortium SAESA will sell power onto the regulated (70%) market. In May 2009, it sold the remaining 30% to an unknown buyer on the free market for R$ 7.5 billion (approx. US$ 3.45 billion).
Jirau, the second dam, was auctioned in May 2008, to a consortium led by French utility GDF Suez that includes the following partners.
31.5% of the financing of Jirau, not financed through BNDES and other banks (see below), will be financed by the consortium. Suez is likely to invest R$ 1.5 bn. Jirau will have 46 bulb turbines installed, each with a diameter of 7.5m. 28 turbines will be constructed in Brazil by Voith-Siemens, Alstom e Andritz VATech Hydro with a budgeted cost of R$ 2bn. Another 18 turbines will be built in China by Dongfang for US$ 410 million. Consortium ESBR/CESB will sell power onto the regulated market (70% of capacity, at a price of R$ 71.37 per MWh) and the unregulated market. dodgy aspects
social impact
According to the project Environmental Impact Assessment (EIA), some 3,000 people will be forced to move from their homes, although judging from past dam projects in Brazil, this number is probably an underestimate. The decline in fisheries will seriously affect commercial and subsistence fishermen. Thousands of people living downstream will face declining crop yields as a result of the loss of the annual deposition of fertile silt on the flood plains,will be deprived of transportation and run the risk of mercury contamination. Indigenous groups will be affected by thousands of migrants arriving in search of work on construction crews. Public health impacts in a region where malaria and other tropical diseases are endemic are likely to be substantial, with stagnant pools of water providing breeding grounds for mosquitoes and other disease-carrying insects.A study in august 2009 from the health and environmental department in Porto Velho, Rondônia, showed that since the construction of Jirau’s plant began malaria incidents have increased 63,6%. Furthermore, there are signs that indicate the presence of isolated indigenous groups in the area to be flooded by the dams. environment
The region is a treasure of biodiversity. The Madeira River supports the life of an estimated 750 fish species, 800 bird species, and other endangered rainforest wildlife, and is home to rubber tappers, Brazil nut gatherers, and fishermen. Protected areas, including a reserve used by people who extract natural forest products, will be inundated by the dams. The Madeira River project will further contribute to the fragmentation of Rondônia's ecosystems and to the clearing of vast areas of the region's remaining forests. A 600% increase in deforestation rates over last year was already reported in the area surrounding the Rio Madeira, after the preliminary license for the dams was granted in July 2007. The dams will seriously affect migratory fish and other aquatic species on the Madeira. Several species of large catfish migrate some 4,500 km each year to the upper Madeira to reproduce. Construction of the dams will block these migration routes, affecting the survival of the catfish. In addition, the dams are likely to cause more flooding than expected due to the huge amount of sediments carried by the Madeira river (around 500 million tons/year, equivalent to all other rivers in the Amazon basin) and cause the disruption to 33 endangered mammal species that are found in the project area.
Many suspect that the project sponsors are after something more ambitious: opening the upper Madeira to navigation by fitting the dams with locks. The extra cost would be small. Lower transportation costs would encourage farmers to plant much more soya and grains - at the expense of the remaining forest. Large dams in the rainforest also emit enormous quantities of greenhouse gases, including methane, contributing to global warming. human rights
Bolivian organizations filed a complaint at the Organization of American States (OAS) alleging violation of human rights, such as the right for information, due to Brazilian government's reluctance to consult the government of the neighboring country and perform studies to assess potential trans-boundary impacts of the Madeira River dams. Populations living in the area affected by the dams say they have been pressured by the companies to move,despite the fact that they have not come to agreements regarding compensation and resettlement.
Violations of Brazilian and international labor legislation have already occurred since irregular working conditions at a construction site associated with Jirau’s plant have been confirmed. Moreover, also in September, workers at the Jirau’s construction site decided to strike for better payment and working conditions. gender aspects
The World Commission on Dams found that women and ethnic minorities were disproportionately affected by dam projects. As women are often responsible for ensuring the sustainable livelihoods of their families, impacts on these livelihoods through destruction of fisheries, flooding of agricultural land and forests, and displacement often result in women bearing a disproportionate share of the costs. It is women who are often left with the burden of caring for their families, finding alternative land and water sources and alternative livelihoods when these are taken away through the development of destructive dam projects. financial institutions involved
banks
Banco Bradesco
- profile
Banco do Brasil
- profile
Banco do Espirito Santo
Banif
Caixa Economica Federal
Santander
- profile
development banks (national and IFI's)
Banco da Amazonia S.A. (BASA)
Banco do Nordeste (BNB)
national development banks
BNDES
investment funds
FI-FGTS
multilateral development banks
Interamerican Development Bank (IDB)
World Bank (IBRD, IDA)
applicable policies
Equator Principles should apply to this project.
This is a category A project. The most important IFC Performance Standards in the case of Rio Madeira are: In December 2007, COIAB - an association that gathers indigenous peoples from the Amazon - has issued a public statement demanding the cancellation of the environmental license and the auction of Santo Antonio dam. COIAB claims that indigenous peoples have not granted free, prior and informed consent to the project despite being affected, according to ILO Convention 169 ratified by Brazil and a fundamental safeguard of performance standard 7. Hence, banks that signed the Equator Principles CANNOT finance this project. Banco do Brasil, Bradesco and Itaú-Unibanco are signatories of the Equator Principles. Moreover, the financing of Santo Antonio by private banks is based on the premise that the Principles apply. what must happen
These mega-projects are not indispensable for providing energy for Brazil’s development, although the government is trying to present them as such. The Brazilian government must be convinced that the river bank dwellers and indigenous peoples, and ecosystems along the rivers of Amazonia are worth protecting. A key alternative to the Madeira River dams is increased energy efficiency. Losses in the distribution of energy in the country's electricity system - for both technical and commercial reasons - amount to 16.5% (compared to 6.5% on average in Europe). Tackling these losses would be another lucrative alternative to expensive mega-projects. Wind, biomass, and solar energy and small hydro projects could also contribute significantly towards meeting Brazil’s future energy needs. With the global economic crisis, energy consumption in Brazil has fallen, providing an opportunity to reorient the country’s energy policy.. In order to live up to their responsibilities and to protect their own and clients' assets as well as their reputation, financial institutions must abstain from getting involved in this project. For further information, please get in touch. Our contacts are mentioned above. |
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