July 13, 2006 To: Mr. Luis Alberto Moreno, President, Inter

July 13, 2006
To:
Mr. Luis Alberto Moreno, President, Inter-American Development Bank (IDB)
Dear Mr. President:
We are writing to express our extreme concern regarding news reports which
indicate that the Inter-American Development Bank is planning to partially finance
the construction of the Madeira River Hydroelectric Dam / Industrial Waterway
Complex (reports in the Folha de São Paulo, June 4, 2006; Economist, June 1,
2006; Rondonotícias, May 26, 2006; Carta Maior, April 6, 2006; Gazeta Mercantil,
February 17, 2006).
As you are aware, the Madeira is the second largest river in the Amazon basin,
and is a global hotspot of biodiversity. The damming of the Madeira would cause
irreversible damage to this diversity from the upper Madeira to its mouth, and
would even affect the Amazon River itself, given that the Madeira is its the principal
source of sediments and nutrients. The ecological corridor of the Madeira River
has 750 fish and 800 bird species. The loss of the fish species of highest economic
value as a result of the building of the dam would affect fishing, a vital pillar of the
regional economy and a source of survival for thousands of families. Food security
and protein supplies would also be affected.
In 2004, Brazil´s National Economic and Social Bank (BNDES) stated it would
support the Madeira River Complex to facilitate the expansion of agricultural
monocultures in the region, which they said could extend to 30 million additional
hectares in Brazil, Bolívia, and Peru as part of a series of projects known as the
Initiative for the Integration of Regional Infrastructure in South America, or IIRSA.
The IDB is part of the coordination of these projects, along with the Andean
Development Corporation (CAF) and the Financial Fund for Development of the La
Plata Basin (Fonplata). It is apparent that the Santo Antonio and Jirau dams are
only the first of a series of dams and waterway engineering projects meant to
implant an industrial waterway on the Madeira, Beni, and Madre de Dios Rivers.
The project´s cost, officially estimated at US $9 billion for the initial two dams, in
addition to more than US$ 1 billion for an electrical transmission corridor to
Southeastern Brazil, more than 2,000 km long, cannot be justified, given the fact
there are economically more logical alternatives, principally involving the need for
investment in energy efficiency. The World Bank judges, conservatively, that
efficiency could replace 25% of the additional hydropower being planned for the
country - about 20 GW, or more than three times what the two dams could
generate. You should also be aware that the environmental impact studies for the
project presented by the state company Furnas and private construction firm were
considered inadequate by technical analysis of the Brazilian Environmental
Institute (IBAMA), leading this federal government agency to solicit additional
studies on various critical issues, among those the impacts we cite above.
In our view, a decision to finance the damming of the Amazon´s second largest
river should not be taken without extremely careful analysis of the direct and
indirect impacts the project would have, including its effect in increasing the area
deforested in the Western Amazon. It should also be remembered that the
Amazon also has an enormous impact on global climate, and influences patterns of
rainfall throughout South America; it is also a source of genetic resrouces, and
possesses unique cultural and biological diversity.
The IDB should not repeat its recent experience in financing hydroelectric dams in
Brazil such as Cana Brava and Campos Novos, where the fundamental rights of
dam-affected people have been violated by the companies operating the dams.
In closing, we wish to say that we are available at any moment to discuss and to
provide in greater detail information regarding the consequences of the projects
being planned for the Madeira River.
Sincerely,
(please reply to International Rivers Network, 1847 Berkeley Way, Berkeley
California 94703, fax 1.510.848.1155, e-mail [email protected]))
Cc:
Mr. Demian Fiocca, President, BNDES
Enrique García Rodríguez, Executive President, CAF
Mr. John Briscoe, Director, World Bank, Brazil
Waldemar Wirsig, Representative IDB, Brazil
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