Brazil has given the green light for one of the largest hydro projects to be undertaken in decades. The 11,000MW hydro project on the Xingu river, a tributary of the Amazon, will add almost 16% to the installed generating capacity in Brazil, while the government is considering allowing the private sector to develop the scheme under a build, operate and transfer basis. The concession is to be tendered by the end of the year and officials in the electricity sector say the project could be in operation by 2008.

Proposed over ten years ago, the project has been on hold because of environmental and financing concerns. But Brazil, through its Ministry of Mining and Energy, now intends to proceed with the development to alleviate chronic power shortages affecting the country. Original plans have been changed to take advantage of a meander in the Xingu river so that the impoundment will occupy space already subjected to annual flooding. Such changes, in response to previous environmental concerns, are expected to ease procurement of external financing for the scheme, particularly from the World Bank and the Inter-American Development Bank. Brazil’s National Development Bank (BNDES), federal power monopoly Eletrobras, mining giant Cia Vale do io Doce and the Odebrecht industrial group are also reported to be likely partners in the project.

…as plans get under way for rolling blackouts

Water shortages in its hydro reservoirs, as well as ballooning energy demand, is forcing Brazil to appeal to consumers to save energy in the midst of rolling black outs planned to commence on 1 June 2001. The proposed power cuts are expected to reduce consumption by about 20%.

Brazil has not had power rationing since 1987 but demand for electricity in Brazil has been growing by 4.5% a year. In addition a severe drought has depleted storage at hydro reservoirs in a country which relies on hydroelectricity for 90% of its power. At the end of 2000, Brazil’s installed capacity stood at 65,757MW with 59, 627MW of capacity coming from hydroelectric plants.

The plan calls for rationing to start in Brazil’s economic heartland along the Sao Paulo-Rio de Janeiro axis, in the northeast tourist region and in central-west states which are rich in mining and agriculture. Meanwhile the proposed privatisation of CESP (Companhia Energetica de Sao Paulo), Brazil’s third largest power generator, has been suspended indefinitely by the Sao Paulo government due to the country’s deepening energy problems.