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E.O. 12958: N/A 
TAGS: SENV ENRG ETRD KSCA BR
SUBJECT: BRAZIL AND BOLIVIA TO DISCUSS HYDROELECTRIC POWER PLANTS 
 
¶1. The Government of Brazil (GoB) is promoting a project to build 
two hydroelectric power plants at an estimated cost of US$ 20 
billion, close to the border with Bolivia on the Madeira River in 
the Amazon Basin state of Rondonia.  The Madeira River is a main 
tributary of the Amazon River and it originates in the Bolivian 
Andes Mountains; in Bolivia it is known as the Madre de Dios River. 
The two power plants, Santo Antonio and Jirau, would produce an 
estimated 6,500 plus Megawatts of electrical energy.  The so-called 
"Madeira River Complex", one of President's Lula election campaign 
promises, is viewed here as a potential development solution for the 
Amazon region of Brazil and a near term solution to avoid another 
energy blackout in the country.  The environmental impact study 
prepared by the two companies responsible for the construction 
project of the compound concluded that no impacts would take place 
on the Bolivian side. 
 
¶2.  According to the local press, however, the Bolivian Government 
argues that the dams, power plants and associated reservoirs would 
have various environmental impacts in both countries, especially, in 
the area around the Bolivian border.  They note that the 
Madeira/Madre de Dios Basin concentrates 95% of the annual flow of 
Bolivian rivers, together with almost all of the country's navigable 
waterways.  The Bolivia government, according to local media 
reports, states that the main impacts would be a rise in Bolivian 
river levels and flooding in some agricultural areas of the country. 
 Social movements and NGOs in Bolivia reportedly are strongly 
opposed to the dam project. 
 
¶3. According to Brazilian dailies, Bolivian Foreign Affairs 
Minister, David Choquehuanca, sent a letter to Brazilian Foreign 
External Relations Minister Celso Amorim stating his concern about 
the impacts the prospective dams and reservoirs would have in 
Bolivian territory.  Choquehuanca reportedly proposed a bilateral 
agreement that would create a commission composed of members of both 
countries to discuss any project concerning the Madeira River. 
Amorim rejected the idea of a bilateral commission but invited 
Choquehuanca to come to Brazil in December to get acquainted with 
the project and reassured him that the two plants would not have 
negative impacts in Bolivia.  Amorim emphasized that there is still 
a lot to discuss with respect to the complex and that construction 
will not happen in the near future.  Amorim's reassurances came 
after Brazilian statements in October that it is willing to make 
changes in the project if necessary to meet Bolivian concerns. 
 
¶4.  Specifically, during the International Climate Change 
Conference, in Nairobi, Kenya, Environmental Minister Marina Silva 
said that the environmental impacts of the Madeira River Complex 
would not affect Bolivia, since a third of the construction project 
had been cancelled and the necessary changes to the project had 
already been made.  State of Rondonia Authorities have requested 
that three independent environmental experts review the 
environmental impact study, which is being elaborated by the 
partially government-owned power company Furnas and the private 
sector construction giant Odebrecht.  This study will likely be 
ready by the end of November.  Previously published preliminary 
findings of the review of the study are not entirely consistent with 
Minister Silva's statements as they suggest impacts such as loss of 
biodiversity, death of marine life and flooding of agricultural 
areas are likely to take place in Bolivia as well as Brazil should 
the project come to fruition. 
 
¶5. COMMMENT:  For the moment, the Brazilian government is waiting 
for the final results of the environmental impact review of the 
experts, although in the end, in our view, the project will likely 
go forward.  End Comment. 
 
SOBEL