Brazilian Construction Giant Odebrecht Withdraws from Peruvian Mega-Dam

For Immediate Release

November 22, 2011

Lima, Peru: Brazilian construction giant Odebrecht announced yesterday that it would withdraw from a commitment to develop the 1278 MW Tambo-40 Dam on the Tambo River in the Peruvian Amazon. In an official letter to the Peruvian Ministry of Energy and Mines, Odebrecht stated that after completing preliminary studies and learning of the strong opposition by indigenous communities, the company decided to “respect the opinion of local populations” and withdrew from the project.

“This is a great achievement for the Ashaninka communities, who for years have fought against dams on the Ene and Tambo Rivers,” said Monti Aguirre, Latin America Program Coordinator for International Rivers. “It also calls into question the Peruvian government’s plans for building a series of dams on the Ene-Tambo River, where indigenous communities are vehemently opposed to dam construction.”

The Tambo-40 project would affect more than 14,000 indigenous peoples of the Tambo and Ene River. To convince Odebrecht, the Ashaninka of the Tambo River invited company officials to meet with community members in traditional assemblies to listen to the concerns of the indigenous peoples. The withdrawal of Odebrecht leaves Tambo-40 without a developer.

“We welcome this decision by Odebrecht to respect our rights. We hope that other Brazilian dam builders will follow Odebrecht’s lead and make a similar decision. We are very concerned about dam construction because there is already a very high rate of malnutrition in our children, and we depend on the river’s resources, which would have disappeared if the dam were built. As the river is also our only means of transportation, this project would cut us off from the rest of Peru,” said Manuel Leon from the Central Ashaninka of the Tambo River.

The project would submerge 22,000 hectares of forest, and communities fear that the network of roads for building the dam and power lines would open up the area for illegal activities and colonization of the protected Otishi National Park and Ashaninka Communal Reserve. The Ashaninka will now turn their attention to convincing Brazilian company Electrobrás, interested in building another dam on the Tambo River – the Tambo-60 – to withdraw.

Tambo-40 would have been for export of hydroelectric power to Brazil and was one of the projects contemplated under the energy agreement signed between Peru and Brazil in June 2010. Odebrecht’s decision comes as a blow to President Ollanta Humala, who has recommitted his government to the agreement signed by his predecessor, President Alan García. The agreement commits Peru to supplying more than 6000 MW of power to Brazil, most of which is expected to come from hydropower in the Peruvian Amazon, which is one of the world’s biodiversity hotspots. Many of the projects contemplated by the agreement were designed by the Brazilian electric utility Eletrobrás in conjunction with Brazilian multinational construction giants Odebrecht and Andrade Gutierrez, all of which would be directly involved in dam construction with funding from the Brazilian national development bank, BNDES.

“We hope that the new government and congress reevaluates the energy agreement and looks for other ways to meet Peru’s development needs than exporting hydro to Brazil. Our rivers should not become vehicles for supplying Brazil’s energy-intensive industries with power,” said Ruth Buendia Mestoquiari from the Central Ashaninka del Rio Ene. “We are asking the Peruvian government to give permanent legal protections to the Ene and Tambo Rivers so that they can be preserved for future generations of Ashaninka.”

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