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Brazil seeks more partners for Belo Monte-report

Eletrobras seeks private-sector partners for Belo Monte
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Dodgy deals
By Reuters | Sao Paulo, Brazil, Jul 7 2010

Brazilian state-owned power utility Eletrobras (ELET6.SA) is in talks to add more private- sector partners to build the massive Belo Monte dam in the Amazon rainforest, Valor Economico newspaper said on Wednesday, citing Chief Executive Jose Antonio Muniz.

Under current laws, Eletrobras, which controls more than 80 percent of electricity generation in Brazil, is unable to build a hydroelectric dam without the help of private-sector partners that speed up equipment purchases and contracting of some services, Valor said.

One of the possible new partners could be OAS, a construction company, Valor said, citing Muniz.

Muniz's remarks highlight the problems facing the government and its partners in Belo Monte, including strong opposition from surrounding communities and conservation groups who say the project, which could cost as much as $17 billion, will bring huge social and environmental costs.

Belo Monte is one of nine hydroelectric dams being planned in the Amazon and part of the largest development strategy for the region since the 1964-85 military dictatorship drove muddy roads through the world's largest rain forest. Belo Monte would be the world's third-largest hydroelectric dam, according to government data.

Muniz denied that new partners would dilute the stakes of existing consortium members such as Construtora Queiroz Galvao, Valor said. Eletrobras will retain a 49.98 percent share in the Belo Monte project and pension funds will continue to participate, he said.

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Reporting by James Matthews; Editing by Guillermo Parra-Bernal and Maureen Bavdek) (james.matthews@thomsonreuters.com; Tel: +55-11-5644-7752; Reuters Messaging: james.matthews.reuters.com@ reuters.net)



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