Two days ago the Brazilian government has granted the preliminary license for the hydropower project to planned in the middle of the Amazon, on the Xingu River. The new mega-hydropower plant, Belo Monte, to have about 11 GW of installed capacity, has been been granted the preliminary license based on the resolution of about 40 conditions covering issues related to water quality, wildlife, sanitation, local population, social compensation and rehab of degraded areas, to name a few. One of the major changes in the design of the project is the reduction of flooded areas upstream from the dam.

The preliminary license, however, doesn't allow any developments to begin, but simply allows the auction for the project. If developed and completed, it will be the third largest hydropower project in the world, and the second largest in Brazil. The project will have two water accumulations, both at about 516 km2 in area. The project represents an investment of about USD 12.3-17.5 billion, with the BNDES bank being the main financer of the project, with about a third of the projects total cost.

This move has also provoked negative reactions from parties interested in preserving the Amazon area intact. Some major opponents of the Belo Monte hydropower project, such as a coalition of environmentalists, indigenous people, and social movements in Brazil have expressed strong criticism of the project. The main issue seems to be the fact that the project will divert the flow of the Xingu River, and devstate the surrounding area of the Amazon rainforest, which in turn will directly threaten the survival of indigenous people.

Public hearings have been requested to put the project in front of a larger number of Brazilians, but further legal obstacles for the Belo Monte project are most likely. Local peoples have been fighting the idea of such a large project in this area since the 1980's, demanding an approach that would prevent the destruction of the ecosystems and biodiversity that have existed in "peace" for millenia.

Whichever way the project goes, its realization is a major technical challenge with very large scale construction work, and a very large workforce (which is one of the benefits of the project – work for many people for a couple of years). Another possible problem for the project is the fact it will generate a smaller amount of energy during the low water period (3-4 months a year).

Project developers will also need to provide channels for massive financing for the remaining two thirds of the required financing. This may be useful for the economy, getting work going, but let's not forget that the global economy is still quite fragile, so entering multi-billion dollar loans may prove to be hazardous for companies involved in the project.

This is basically a global issue, even though its Brazil's backyard. Let's not forget the Amazon rainforest is the lungs of our planet. If you have an opinion about this, please sound off in the comments…

[source: IBAMA, Amazon Watch, image: InternationalRivers.org]