Peru power dams worry NGOs even after delays

Fri Dec 2, 2011 10:16pm GMT

* Brazil's OAS seeking financing for $4 bln Inambari dam

* NGOs oppose not-yet-ratified Peru-Brazil energy accord

By Caroline Stauffer

Dec 2 (Reuters) - Peruvian NGOs and indigenous groups said on Friday they would continue fighting proposed dams in the Amazon despite growing signs the projects will be delayed or perhaps never built.

The former presidents of Peru and Brazil signed a 50-year bilateral energy agreement in June of 2010 requiring Peru to produce up to 72,00 megawatts of hydropower, much of it to be exported to neighboring economic giant Brazil.

That accord still needs to be approved by Peru's Congress and some energy experts have said the tentative pact includes projects that make little economic sense.

Civil society groups oppose the agreement because generating that amount of power would require allowing Brazilian companies to dam rivers in Peru's Amazon jungle, displacing indigenous groups and other people.

Peruvian Prime Minister Salomon Lerner has made it clear that hydroelectric plants would bring affordable energy to Peruvians in rural areas who lack electricity.

"Today we want to start a big hydroelectric project in the VRAE that will give between 4,000 and 6,000 workers jobs," he said, referring to new plans for a dam in the country's underdeveloped, coca growing Apurimac-Ene River Valley.

He didn't provide details on the project in the VRAE, which drains into the Amazon basin, or say if the new dam was part of the proposed energy accord.

Peru's mines and energy ministry cleared five projects in the accord with total capacity of 6,673 megawatts for companies to do feasibility studies on. But four projects have since languished as companies let their temporary concessions expire or wait to push ahead with their plans.

"Even if four concessions have been declared null or have lapsed, that doesn't mean there aren't plans for other dams," said Vanesa Cueto, director of sustainable energy at Peruvian NGO DAR.

At least one dam shows no signs of being built. Brazil's Odebrecht submitted a letter to Peru's Ministry of Energy of Mines on Oct. 25, saying it had decided not to continue with the Tambo 40 project, one of the five proposed dams, "out of respect for local populations."

Still, Cueto says Brazil and its companies will remain interested over the long term.

"There's still plenty of interest in building hydropower projects in Peru from Brazilian companies," she said.

Brazil, Latin America's largest country, faces frequent blackouts and gets 20 percent of its electricity from the massive 14,000 MW Itaipu dam on its border with Paraguay.

It is looking for new providers to feed its giant economy after complaints lodged by Paraguay forced it to triple the price it pays for power from Itaipu.

Peruvian environmental and indigenous groups are most concerned about the $4 billion Inambari dam, which is one of the biggest of the five dams to be built and could still go forward.

A consortium controlled by Brazilian builder OAS has sought funding from Brazilian state-development bank BNDES to advance the 2,000 megawatt project, according to a Brazilian press report. [ID:nN1E7AT03H]

More than 3,000 people would be directly affected by rising water levels from the dam, while some 4,000 would face deforestation, loss of crops and other secondary affects, said Jose Serra, Director of ProNaturaleza, another Peruvian NGO.

The energy accord could put Peru's leftist President Ollanta Humala, who took office in July, in a tight spot.

He was strongly backed by the rural poor, pledging to stand up to big multinational companies and ensure Peru's own economy, which grew 8.8 percent last year, can meet its own ballooning energy demands. He also calls Brazil a strong ally.

Despite living in one of the world's fastest-growing economies, one third of Peruvians have not benefited from the economic boom and live in poverty. (Additional reporting by Teresa Cespedes; Editing by Marguerita Choy)