BNDES Called to Account for Projects

Latin American communities and organisations want Brazil's national development bank, BNDES, to stop sponsoring 'destructive' renewables projects.

Plataforma BNDES, a coalition of nearly 30 representatives from Brazilian social movements and non-governmental organisations, is pressing the bank to operate transparently, and to focus on the social and environmental effects of projects it finances.

The group is homing in on the 11-gigawatt (GW) Belo Monte dam proposed for the Amazon region of Brazil.

Christian Poirier, Brazil programme co-ordinator for Amazon Watch, claims that BNDES is eager to fund the project despite controversy over environmental and social impacts.

Local indigenous communities claim they have not have been consulted, and are threatening to "go to war" if the dam is built. The project is expected to be tendered this year after many delays.

The bank is expected to provide R$9.5bn ($5.5bn) in funding for the massive hydroelectric power plant, which the British singer Sting successfully opposed in the 1980s when it was first proposed.

Of a total R$37bn worth of energy projects financed by BNDES, nearly R$30bn has gone to big dams since 2003. Since 2007, the bank has approved the financing of R$21.6bn worth of big hydro projects with 10GW of installed capacity overall.

Renewable energy projects, including dams, today receive interest rates of between 7.61% and a maximum total of 10.72% in a country where rates are usually above 11% and have sometimes gone up to 45%.

Plataforma BNDES is focusing on the bank because it has funded 70% of the renewables projects in Brazil. It is seeking to get the bank to adopt social and environmental criteria in its analysis and approval processes, as well as to repair the damage caused by projects.

"It's a very basic argument: if you use public money, you have to show where it goes," says Poirier.

Nelson Siffert, head of the bank's infrastructure department and in charge of large hydros, defends the construction of dams as environmentally sound.

Siffert argues that dams are less socially and environmentally damaging today, and says the bank is offering additional lines of credit for local environmental and social development projects surrounding them.

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