BRAZIL AND BOLIVIA TO DISCUSS HYDROELECTRIC POWER PLANTS

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E.O. 12958: N/A
TAGS: SENV ENRG ETRD KSCA BR
SUBJECT: BRAZIL AND BOLIVIA TO DISCUSS HYDROELECTRIC POWER PLANTS


1. The Government of Brazil (GoB) is promoting a project to build
two hydroelectric power plants at an estimated cost of US$ 20
billion, close to the border with Bolivia on the Madeira River in
the Amazon Basin state of Rondonia. The Madeira River is a main
tributary of the Amazon River and it originates in the Bolivian
Andes Mountains; in Bolivia it is known as the Madre de Dios River.
The two power plants, Santo Antonio and Jirau, would produce an
estimated 6,500 plus Megawatts of electrical energy. The so-called
"Madeira River Complex", one of President's Lula election campaign
promises, is viewed here as a potential development solution for the
Amazon region of Brazil and a near term solution to avoid another
energy blackout in the country. The environmental impact study
prepared by the two companies responsible for the construction
project of the compound concluded that no impacts would take place
on the Bolivian side.


2. According to the local press, however, the Bolivian Government
argues that the dams, power plants and associated reservoirs would
have various environmental impacts in both countries, especially, in
the area around the Bolivian border. They note that the
Madeira/Madre de Dios Basin concentrates 95% of the annual flow of
Bolivian rivers, together with almost all of the country's navigable
waterways. The Bolivia government, according to local media
reports, states that the main impacts would be a rise in Bolivian
river levels and flooding in some agricultural areas of the country.
Social movements and NGOs in Bolivia reportedly are strongly
opposed to the dam project.


3. According to Brazilian dailies, Bolivian Foreign Affairs
Minister, David Choquehuanca, sent a letter to Brazilian Foreign
External Relations Minister Celso Amorim stating his concern about
the impacts the prospective dams and reservoirs would have in
Bolivian territory. Choquehuanca reportedly proposed a bilateral
agreement that would create a commission composed of members of both
countries to discuss any project concerning the Madeira River.
Amorim rejected the idea of a bilateral commission but invited
Choquehuanca to come to Brazil in December to get acquainted with
the project and reassured him that the two plants would not have
negative impacts in Bolivia. Amorim emphasized that there is still
a lot to discuss with respect to the complex and that construction
will not happen in the near future. Amorim's reassurances came
after Brazilian statements in October that it is willing to make
changes in the project if necessary to meet Bolivian concerns.


4. Specifically, during the International Climate Change
Conference, in Nairobi, Kenya, Environmental Minister Marina Silva
said that the environmental impacts of the Madeira River Complex
would not affect Bolivia, since a third of the construction project
had been cancelled and the necessary changes to the project had
already been made. State of Rondonia Authorities have requested
that three independent environmental experts review the
environmental impact study, which is being elaborated by the
partially government-owned power company Furnas and the private
sector construction giant Odebrecht. This study will likely be
ready by the end of November. Previously published preliminary
findings of the review of the study are not entirely consistent with
Minister Silva's statements as they suggest impacts such as loss of
biodiversity, death of marine life and flooding of agricultural
areas are likely to take place in Bolivia as well as Brazil should
the project come to fruition.


5. COMMMENT: For the moment, the Brazilian government is waiting
for the final results of the environmental impact review of the
experts, although in the end, in our view, the project will likely
go forward. End Comment.

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