A 2,000 MW dam, the largest in Peru, at confluence of Madre de Dios, Puno and Cusco will send 75% of electricity to Brasil
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Location |
Peru
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Total Cost |
US$4,000 million
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Status |
Not Financed
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Context[1]
Latest News
February 18. The Peruvian Embassy recently released the final text of the "
Agreement on electricity supply in Peru and export of excesses to Brazil", whose sole article concerning the environment is very vague: "Art.9 Sustainable Development. All activities within the agreement will be carried out respecting the sustainable use of natural resources and environmental conservation,..." Previously, those responsible for drafting the agreement received a series of recommendations from civil society organizations and professionals, which were not included.
Summary
The Inambari Hydroelectric Center would be the largest in Peru and the fifth largest in Latin America, requiring an investment of 4 billion dollars, with an installed generation capacity of 2000 MW. The dam will be constructed under a framework agreement signed by the governments of Peru and Brazil in April 2009 for the construction of six hydroelectric dams in Peru.
The direct benefits to Peru would essentially be in the form of income from energy exported to Brazil. The bilateral agreement states that part of the energy would be for national consumption, however currently, no information is available regarding percentages of energy generated for export and energy for internal consumption.
Among the possible impacts of the project, according to ECSA Engineers, the company in charge of the EIA for the project, the dam’s reservoir would flood 161Km of the Interoceanic Highway as well as 65 communities in the departments of Puno, Cuzco and Madre de Dios that would have to be relocated and compensated. Additional impacts include those typical of dams in the Amazon, including affectation of flora and fauna, interruption of fish migratory routes, impacts on the flow and navigability of the river, among others. The final EIA of the project is expected to be released by ECSA Engineers in early 2010.
Town of Inambari, which will be flooded by the reservoir if the dam is built. Photo: Barbara Fraser
BACKGROUND
The rapidly- progressing process of occupation of the Peruvian jungle during recent decades has brought the construction of highways, petroleum exploitation and mining in addition to normal agriculture, cattle ranching and forestry activities. This rapid encroachment has been exacerbated by the addition of yet another element- the exploitation of hydroelectric potential. On April 28th, 2009 Presidents García and Lula da Silva formally launched a process that will culminate in the construction of an undetermined number of large dams on the Amazonian rivers of Peru, whose main purpose will be to meet the insatiable demand for energy of its neighbor, Brazil.
News of the signing of a memorandum of intent between Brazil and Peru- which includes a reference to potential hydroelectric plants- was given much more attention in Brazil than in Peru, where it went practically unnoticed, despite its very serious geopolitical, economic, social and environmental significance. Essentially, the agreement allows Brazil to plan, finance, build and operate up to six large hydroelectric dams in Peruvian territory in order to supply its energy needs, with a commitment to buy a large portion of the produced energy from Peru. The hydroelectric dams to be constructed are: Inambari (2,000 MW), Sumabeni (1,074 MW), Paquitzapango (2,000 MW), Urubamba (940 MW), Vizcatán (750 MW) and Chuquipampa (800 MW), at a total cost of approximately US$16 billion.
The concerns associated with Inambari are centered around issues seen with other problematic dams in Brazil, most notably the Río Madeira hydroelectric complex near the border of Peru, Bolivia, and Brazil. The construction of this and other dams is a response to Brazil’s need to meet the enormous energy demand of its industrial centers while reducing its dependence on fossil fuels, through securing alternative sources of energy. At the same time, these projects represent significant investment opportunities for the private sector as well as Brazil’s multilateral bank. For these and other reasons, Brazil has for decades been promoting the construction of large dams like Tucuruí, Balbina and Itaipú, and is currently promoting dams such as Belo Monte, and Inambari, in Peru and Cachuela Esperanza in Bolivia, among others.
Hydroelectric projects in Peru
Electricity demand and supply in Peru
According to the report "Electricity Supply 2010-2018" by the Central Reserve Bank of Peru, the country has a current demand of 399 MW of electric energy, while the installed capacity could supply as much as 5152 MW. The estimated annual growth of electricity demand is 7.5 %. It is also noted that maintenance of a reserve margin of 20% in the electric system between 2008-2018 requires an annual growth in supply of 550 MW. National electricity demand registered an average annual growth rate of 5.9% between 2000-2007, far exceeding the growth in supply (3.3% per year). At these rates, overall supply increased by 25% between 2000 and 2007 while the demand grew 49% during the same period. As a consequence, the reserve margin fell from 55% to 30% during that period. The growth in demand can be attributed in large part to the growth of the industrial sector.
Background on the Inambari project
- 1976-1979: The General Authority on Electricity of the Ministry of Energy and Mining, with support from German Technical Cooperation (GTZ), conducted the Evaluation of National Hydroelectric Potential, choosing the Inambari River as one of ten projects for development of hydroelectric centers in Peru.
- November 2006: Memorandum of Understanding between the Ministries of Peru and Brazil for the creation of a mixed permanent commission for energy, mining and geology.
- November 2007: The General Authority on Electricity (DGE) of the Ministry of Energy and Mining presented the final report "Development of executive summaries and studies for hydroelectric centers with potential for export to Brazil", in which the Inambari Hydroelectric Center is included (C.H. INA 200).
- May 2008: Bilateral agreement between Peru and Brazil for Energy Cooperation for construction of 17 hydroelectric dams in Peru, one of which is Inambari.
- June 2008: Temporary concession granted to EGASUR for studies on Inambari Hydroelectric (for 2 years).
- April 2009: Memorandum of understanding for support of studies of electric interconnectivity between Peru and Brazil. Location
On reviewing the information, one discovers that the actions to be taken in order to carry out this project were being implemented long before the memorandum was signed. According to the media, two new companies are already working in Peru, the Empresa de Generacion Electica Amazonas Sur SAC, made up mainly of Engevix, the main consulting firm in Brazil, and Inambari Geracao de Energia, a consortium made up by Brazilian state-owned Eletrobras, Furnas and the construction company OAS, also Brazilian. They apparently already have a credit of US$2.5 billion from the Banco Nacional de Desenvolvimiento Economico e Social (BNDES). The studies, carried out by the first of the mentioned corporations are already being carried out by another Brazilian company, PSR Consultants, according to a ministerial resolution of Energy and Mines given in June 2008, in other words a year before the presidential meeting. It could be true that this was not a “state secret” but it also undeniable that the government made no effort to divulge this important event affecting the nation’s future. In fact, the six dam projects are not new. They were already proposed in the 70s based on a study made by a specialized company (Lahmeyer-Salzgitter) with financing by the German government (GTZ) and the World Bank. In this regard, numerous possibilities were detected, 14 of which were priorities. Brazilians chose 6 of these which were most convenient.
The corporations involved have already announced some of the results of the environmental impact study of Inambari. It predictably says, in essence, that "there is no problem” and if there were any, they are easily resolved. This is highly unlikely when we already know, for example, that the reservoir will flood all the existing agriculture in the area, as well as the illegal gold mining and various populated centers which, also, due to the characteristics of the valley, will be unable to be reallocated appropriately.
about the benefits of the project
The expected benefits of the project would depend on energy exports to Brazil. According to statements made bythe former Minister of Energy and Mines, a portion of the generated energy is expected to remain for national consumption, however, currently there is no available information regarding percentages of energy that will be used for exportation and national consumption, although it is expected that the majority will be for exportation. On the other hand, considering the investment will come from private capital, the income for Peru will be income taxes and a single payment for use of water as established in the General Water Law. With regard to the HYDROENERGETIC DOCTRINE, 50% of the income tax payment goes toward this; therefore it does not represent another additional payment.
the project in relation to the southern interoceanic highway (CVIS)
We also know that it will flood between 90 km and 150 km (depending on the final altitude of the dam) of the recently built Interoceanic highway whose very high cost is paid by Peruvians. The abrupt slopes of the region are not stable and can affect the reservoir. According to available information describing the project, the dam reservoir would affect: Stretch 3: 1.3 Km; Stretch 2: 43.3 Km; Stretch 4: 61.5 Km; TOTAL: 106.1 Km.
[1]This section was written based on the analyses of Marc Dourojeanni and Martin Arana
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