Brazil Reverses Approval of Concession Auction for Tapajos Hydro Project

Tapajos communities demanding consultation

A day after a complaint by environmentalist lobbying groups, Brazil's mines and energy ministry revoked its approval of a concession auction to develop the 8,040-MW Sao Luiz do Tapajos hydroelectric project on Brazil's Tapajos River.

The Ministerio de Minas e Energia had published guidelines September 12 for the concession auction in Brazil's official Diario Oficial da Uniao, scheduling the auction for December 15 at which time companies would compete for rights to build Sao Luiz do Tapajos.

Environmentalist groups International Rivers and Amazon Watch issued a statement September 16 saying the ministry's action "provokes outrage."

"The announcement immediately provoked the condemnation of local indigenous peoples, who criticized the federal government's failure to ensure respect for their rights as guaranteed by the Brazilian Constitution and international human rights agreements," International Rivers and Amazon Watch said.

The groups said a statement by the Munduruku tribal group cited a recent meeting with federal officials who promised that the dam would not proceed without a process of free, prior and informed consultation with indigenous communities.

The ministry published a statement September 17 saying it "has decided to revoke" the ordinance setting the concession auction guidelines.

"The repeal of the ordinance was motivated by the need for adjustments associated with the theme of the indigenous component studies, despite the Study of Technical and Economic Feasibility, EVTE, and the EIS/RIMA having been completed by the developer consortium within the agreed deadlines," the ministry said.

Provisions for the auction had called for the project to begin operation in December 2019. It would sell at least 70 to 80 percent of its power to electricity distributors in the regulated power market under contracts running from July 2020 through December 2049.

Technical, economic and environmental feasibility studies of Sao Luiz do Tapajos were developed from a plant-platform concept consisting of a method to plan, design, build and operate a hydroelectric plant or set of hydroelectric plants in legally protected territory or territory apt to receive formal protection and areas of little or no human activity so that its location becomes a site of permanent environmental conservation.

Technical and economic parameters were analyzed by the government's energy research agency, Empresa de Pesquisa Energetica, and forwarded by the ministry to the Tribunal de Contas da Uniao, the accountability office of the national Congress, so that social and environmental constraints were considered as part of the project.

Brazil utility Furnas Centrais Eletricas S.A. invited proposals in August from companies to form a partnership to bid in the upcoming concession auction. Furnas' parent utility, Centrais Eletricas Brasileiras S.A. (Eletrobras), submitted in May a technical and financial appraisal of Sao Luiz do Tapajos to Brazil's Agencia Nacional de Energia Eletrica (ANEEL), which is to administer the concession auction.

Sao Luiz do Tapajos is the largest component of the proposed 12,000-MW Tapajos hydroelectric complex on the Tapajos and Jamanxim rivers in northern Brazil. The complex also is to include the 2,300-MW Jatoba, 528-MW Cachoeira dos Patos, 881-MW Jamanxin and 802-MW Cachoeira do Cai projects, all of which will be built in the Amazon region's Para State.

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