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Brazilian bank approves $10.8 billion loan for controversial Amazon rainforest dam
mongabay.com
November 30, 2012



Belo Monte location. Courtesy of Google Earth.


Brazil's National Development Bank (BNDES) on Monday announced it has approved a $10.8 billion (22.5 billion Brazilian reais) loan to the consortium that is building the controversial Belo Monte dam in the state of Par´ in the heart of the Amazon rainforest, reports International Rivers, a group that is campaigning against the dam. The loan in the largest in the bank's 60-year history, according to the group.

Belo Monte is controversial on several grounds. Environmentalists and indigenous groups oppose the project for its potential social and environmental impacts, including forced displacement of river-dependent communities, inundation of tens of thousands of hectares of forest, and disruption of the Xingu River, one of the Amazon's largest tributaries and home to a number of commercially-important fish species. The project will also generate substantial greenhouse gas emissions, according to Philip Fearnside, an Amazon expert at the Instituto Nacional de Pesquisas da Amazônia in Manaus, who calls the dam a "methane factory" due to its design flaws. Others have criticized the high costs of the dam, which is expected to operate at less than 40 percent of its capacity unless two more dams are built upstream. Finally some opponents have said the dam will drive deforestation in the surrounding area. Confirming these fears, in September it was revealed that Belo Sun, a subsidiary of a Candadian gold mining company, has already obtained rights to mine some 130,500 hectares near the dam site. The company says the redirection of 80 percent of the Xingu river will facilitate mining. Amazon Watch, an activist group fighting Belo Monte, says Belo Sun's plans will "fling the doors open to additional mining operations and associated land invasions."

Accordingly, nine Brazilian NGOs on Wednesday filed suit a petition with the Federal Public Prosecutor’s Office (Ministério Público Federal) in a bid to block the dam. The groups are aiming to block BNDES from disbursing dam payments.

Belo Monte has already been held up by several lawsuits, however the project is strongly supported by Brazilian President Dilma Rousseff, who championed the project prior to winning the presidency in 2010.













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