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ENERGY: Brazilian Dams in Peru’s Jungle, to Supply Brazil

Milagros Salazar

LIMA, Jun 17 2010 (IPS) - An energy deal that Peru and Brazil signed this week in the Amazon city of Manaus in Brazil is opposed by environmentalists and local indigenous communities in Peru where the planned hydroelectric dams will be built. What is at stake?

Presidents Alan García and Luiz Inácio Lula da Silva sign energy agreement. Credit: Presidencia de Peru

Presidents Alan García and Luiz Inácio Lula da Silva sign energy agreement. Credit: Presidencia de Peru

Peru has not yet calculated how much energy its domestic market will need from the dams to be built in the Peruvian state of Amazonia under the agreement signed Wednesday by President Alan García and his host, Brazilian President Luiz Inácio Lula da Silva.

Nevertheless, it has promised to provide a fixed proportion of the energy generated to Brazil over the next 30 years. And if Peru ever wants to complain about and modify the energy cooperation agreement, it can only do so after 15 years, Deputy Minister of Energy Daniel Cámac told IPS.

“What sense does it make to sign an agreement without determining whether it is what our country needs?” asked César Gamboa, a lawyer who heads Law, Environment and Natural Resources (DAR), a local non-governmental organisation. “Why don’t we carry out the studies first, before assuming commitments that we might regret later?”

Deputy Minister Cámac said “a broader analysis” is needed to come up with an estimate of the country’s energy needs, and that “we will continue working project by project to see how much is needed.”

Under the agreement, which began to be negotiated in 2006 and is now pending approval by the Peruvian Congress, a series of dams built in Peru will generate 6,000 megawatts of electricity, and according to the government, a priority will be put on domestic supplies and surplus energy will be sold to Brazil.

But engineer Alfredo Novoa, director of ProNaturaleza, another local NGO, told IPS that “Peru doesn’t need energy projects in the Amazon jungle to meet domestic demand.

“There is a potential of 22,000 MW in the Andes highlands and a similar amount in the coastal area, why would we need more?” he remarked.

This South American country has an installed capacity of more than 6,000 MW from different sources, which presently covers demand. According to projections, 12,000 MW will be needed by 2020, and 20,000 by 2050, Novoa said.

By contrast, “Brazil, an emerging power, will have a projected demand of 174,000 MW by 2030,” he pointed out.

But in Cámac’s view, Peru could need much more energy than that, up to 25,000 MW by 2030. “This agreement opens up a much larger market to us, and studies will be carried out to reach an economic balance between the two countries,” the deputy minister stated.

He said a set percentage of the energy generated by each hydroelectric plant would be sold to Brazil for 30 years, although it is not yet clear what that proportion will be.

As it stood in July 2009, the draft agreement established that 80 percent of the energy would go to Brazil and 20 percent to Peru in the first decade. But in the face of protests in Peru, the figures were eliminated from the energy deal, and the proportions are to be negotiated behind closed doors.

Cámac also said that the number of dams and their specific locations are other aspects that have yet to be determined. “They might even be in the Andes, rather than the Amazon,” he claimed.

But the deputy minister himself has referred in public to possible plans to produce energy in the rainforest to sell to Brazil, as IPS saw in two PowerPoint presentation files prepared by the official.

In a presentation at a May 2009 international seminar, Cámac included two controversial projects on the list of possible energy initiatives.

One is a dam on the Inambari river in the Amazon jungle in the regions of Cuzco, Madre de Dios and Puno in the southeast, which will be the largest hydroelectric dam in Peru and the fifth largest in Latin America.

The other is the Paquitzapango dam on the Ene river in the central department (province) of Junín, where the Asháninka indigenous community is concentrated.

And according to Gamboa, there are three other plans in the pipeline: Mainiqui 1 in Cuzco and Tambo 40 and Tambo 60 in Junín.

The total investment for the five dams is estimated at 13.5 to 16.5 billion dollars.

The flooding caused by the dams could displace more than 4,000 indigenous and non-indigenous people in Inambari, and up to 10,000 people in Paquitzapango, most of them belonging to the Asháninka community, which already suffered forced displacement during the 1980-2000 civil war.

“Amazonia peruana en 2021” (Peruvian Amazon in 2021), a book by Marc and Diego Dourojeanni and Alberto Barandiarán, says the Inambari reservoir could have a major impact on the jungle ecosystem.

The destruction of rainforest to make way for the dam and reservoir could lead to a nearly six percent rise in Peru’s greenhouse gas emissions, the book says.

“There are social and environmental costs that have not been taken into consideration,” Gamboa said. “The government is trying to gloss over the details by talking about cooperation, when in reality these are unequal negotiations.”

Brazilian companies would build the two main dams. Inambari is in the hands of the Egasur consortium, made up of two Brazilian firms, OAS and the state-run Eletrobras Furnas.

The concession for building Paquitzapango went to Paquitzapango Energía SAC, behind which is the Odebrecht Group, a construction and engineering powerhouse from Brazil, according to Iris Olivera, the lawyer for the Central Asháninka del Río Ene (CARE) indigenous association.

Odebrecht project manager Cecílio Abrão Jr. visited the CARE offices in May to explain the supposed benefits of the dam.

Olivera said the executive informed the group that Odebrecht is in charge of the feasibility study and that it forms part of a consortium with Eletrobrás and Andrade Gutiérrez, another Brazilian construction company.

OAS — the main shareholder in Inambari — Odebrecht, Andrade Gutiérrez and Camargo Correa are responsible for major construction projects and public works which, financed by Brazil’s state development bank, the BNDES, are a spearhead in Latin America and Africa.

And the projects involve suppliers from Brazil because BNDES financing is conditioned on the use of equipment and parts from that country.

“This shows Brazil’s economic interest in carrying out projects using front companies registered in Peru,” Olivera said.

For his part, Novoa said: “Peru is just another pawn on Brazil’s chessboard.”

The attention of environmentalists and indigenous groups is now focused on the Inambari dam, which will modify the flow of water in the Madre de Dios river, which runs into the Madeira river in Brazil’s Amazon jungle, where a multi-dam hydroelectric complex is being built, the head of ProNaturaleza said.

That means that when the level of water in the Madeira river is low, the Inambari dam could help keep its turbines functioning, he pointed out.

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