A long-delayed environmental licence is expected to be granted shortly, allowing Brazil to push ahead with preparations to build South America’s second largest dam.

Costing around US$8B, the 11000MW Belo Monte project will be located on the Xingu river near Altamira in Para State. Construction should take at least ten years and the plant is scheduled to swing into operation in 2010, says John Cadman, director of hydroelectric power studies at Eletronorte, the northern energy generating subsidiary of federally-owned Eletrobras.

The project, originally costed at US$12B, was first mooted in the early 1990s and was then shelved, partly for environmental reasons. The price has since been reduced because of the incorporation of higher output turbines (bulb type will now be used) and underground channels to the powerhouse, both of which have reduced the scale of the previously planned reservoir.

Instead of a 1200km2 reservoir, only 400km2 of rainforest will now be affected and indigenous people are unlikely to be forced to relocate. — a fact which had been a major stumbling block for the project.

The project will be undertaken in partnership with the private sector. It is not yet clear if Eletrobras or Eletronorte will finance Belo Monte but they should pay for the initial study costs and also possibly the equipment, with repayments being made in the form of energy generated. Brazil is estimated to need 95,000MW of installed capacity by 2007 to meet an annual growth in demand of 5%.

At the end of 1998 Brazil’s installed generating capacity stood at around 62,000MW. A further 6000MW should be added this year.

Latin America’s largest dam is Itaipu (12,600MW) which is jointly-owned by Brazil and Paraguay. Brazil has recently decided to proceed with the installation of two extra turbines at the dam, bringing the total to 20, although tenders for the work were suspended in May because of political problems with Paraguay. The new turbines will raise capacity to 14,000 MW and cost an estimated R$190m (US$100M).