Peru tribes put Brazil dam projects at risk-report

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Wed Nov 30, 2011 11:53am GMT

* Brazilian official tells Valor four projects on hold

* Strong Peruvian tribes' opposition risks delays in dams

* Highlights strength of social organizations in region

* Companies tell Valor that some projects were put off

Nov 30 (Reuters) - Four out of five hydropower projects being built in Peru by Brazilian companies are unlikely to take off as pressure from indigenous tribes and social groups in the Andean country mount, Brazilian newspaper Valor Economico reported on Wednesday.

Citing an unnamed Brazilian government official familiar with the situation, Valor said state-controlled power holding company Eletrobras (ELET6.SA) and construction groups Odebrecht, Andrade Gutierrez and Engevix have either given up on the projects or suspended them indefinitely.

"Companies are letting go of the projects," Valor quoted the official as saying. Odebrecht abandoned the Tambo 40 plan, while the other three companies confirmed the suspension of the Tambo 60, Mainique 1 and Paquitzapango projects, Valor said.

Odebrecht and Eletrobras did not immediately answer calls seeking comment on the story. Efforts to reach representatives of Engevix and Andrade Gutierrez were unsuccessful.

The situation underscores the strength of social movements in countries like Peru, where several recent mining and energy projects meant to help reduce poverty had only a small effect in improving living standards for indigenous peoples.

The projects were expected to produce about 6,000 megawatts of energy, Valor said.

The fifth project, known as Inambari and controlled by Brazilian builder OAS, is in the development process and seeking funding from Brazilian state-development bank BNDES, Valor reported.

Brazil's government backed local companies to undertake projects in Peru, partly in hopes that excess electricity output could be sold to the country. Eletrobras has been convincing investors that setting overseas operations in places like Peru could help diversify revenues. (Reporting by Guillermo Parra-Bernal; Editing by Lisa Von Ahn)

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