Environmental Licensing Continues To Undermine Brazilian Power Projects
BMI View : Another Brazilian hydropower project is facing an uncertain future as a result of environmental licensing issues. The 7.8GW São Luiz do Tapajos hydropower plant, which would be the third largest in the country, has had its environmental licence declined by a federal court judge. However, it is unlikely thi s is the end of the story given President Dilma Vana Rousseff 's displayed commitment to building much needed additional capacity in the Amazon region.
The deficiencies in Brazil's environmental licensing procedures are resulting in significant cost and time wastage for developers. The country's inability to provide a comprehensive, unilateral and most importantly respected ruling on the environmental credentials of a project prior to that project being tendered is contributing to investor wariness over Brazil's infrastructure sector. The failure of the system has led to projects which should never have been approved encountering repeated and costly delays later on in the project life cycle.
The latest project to fall foul of the disorganised nature of the Brazilian environment licensing system is the 7.8GW São Luiz do Tapajos hydropower plant. The dam is the largest of six planned on the Tapajos and Jamanxim Rivers (comprising: 2.3GW Jatobá dam (2.3GW), Cachoeira dos Patos dam (528MW), the Jamanxin dam (881MW) and the Cachoeira do Caí dam (802MW)). The entire complex would have a generating capacity of 11GW, highlighting its importance to the future energy security of Brazil. The project is being developed by a consortium including Eletrobras , Eletronorte , EDF and Camargo Correa . However, despite having been in the planning for a number of years already, with a targeted completion date of December 2017, the project has only just had its environmental licence declined by a federal court judge. Judge José Airton de Aguiar Portela ruled that the project did not provide an adequate environmental impact assessment. The ruling follows reports from public prosecutors that the project would displace more than 10,000 indigenous residents in the Amazon. Eletrobras and Eletronorte have disp uted these claims according to B namericas.
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