BRAZIL AND BOLIVIA TO DISCUSS HYDROELECTRIC POWER PLANTS

UNCLAS BRASILIA 002489 SIPDIS SIPDIS PLEASE PASS TO OES/ETC STATE PASS USTR-CRONIN DOE FOR LADISLAW/WARD USDOC FOR 4332/ITA/MAC/WH/OLAC/MWARD USDOC FOR 3134/ITA/USCS/OIO/WH/RD/SHUPKA AID/W FOR LAC 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. SOBEL