In May of 2002, the Paraguayan CSO Federation of the People of Itapúa and Misiones Affected by Yacyretá (FEDAYIM) filed a second claim with the inspection bodies of the World Bank and the IDB, citing continued deterioration in environmental and health conditions in the project influence area and requesting further investigation. Both the World Bank Inspection Panel and the IDB’s IIM approved the claim and conducted separate inspections. The IIM report, released in late February 2004, found that many social, environmental and economic problems associated with the overall project remained to be addressed. It also found that of the $130 million loan (Loan 760/OC-RG) awarded to EBY, the binational entity implementing the project, for social and environmental mitigation actions in 1995, only $40 million had been spent. Meantime, people in low-lying areas near the dam were found to be suffering from poor sanitary conditions, widespread unemployment or underemployment, and little to no engagement by project officials.
The World Bank Inspection Panel Report, released at the same time, included a number of similar findings and came to conclusion that “[there is] the urgent need for a decision to define the final operating level of the reservoir. The Panel wishes to highlight the economic and social costs associated with any decision regarding the level of the reservoir if it is not politically or otherwise feasible to implement the decision fully and in a timely manner.” This, apparently, provided part of the impetus for the development of yet another remediation plan, the Yacyretá Dam Completion Plan. The plan was developed by EBY and the two governments and approved by the Boards of both the IDB and the World Bank in June 2004. It estimated the cost of “completing” Yacyretá—that is, of carrying out social and environmental mitigation actions that would allow EBY to impound the Yacyretá reservoir to its full design level, 83 meters above sea level (masl)—at $653.4 million. The lion’s share of the necessary financing was to come from the Argentine government, with the remainder ($90 million) from the unspent balance of IDB Loan 760/OC-RG.
By this time, a new citizens’ group had formed to organize the collection of information and the taking of action around the project’s possible impacts on the fragile Iberá wetlands preserve. As a result of pressure from this group, the Iberá-Yacyretá Forum, EBY agreed in May 2005 to carry out some studies to analyze the possibility of seepage from the reservoir into the wetlands preserve at the 76 masl and 83 masl levels. To many observers, this in itself, together with the numerous pending resettlement actions, seemed to be enough to indefinitely postpone plans for raising the reservoir level to the full level. Much to their surprise and dismay, in April 2006 reports began to circulate in the regional media that EBY was planning to do just that. This came at a time when many were trying to make sense of an announcement from the Andean Development Corporation (CAF) that it had approved a $210 million loan for the partial financing of the Yacyretá Completion Plan. CAF later reversed its decision, stating in a June 2006 letter to a number of CSOs that its loan would actually be used to finance road and railways development project in the binational region where Yacyretá is located. Read More