Re-elected Brazil president hopes to spur stalled hydro

Newly re-elected President Luiz Inacio Lula da Silva says he wants to lift the environmental and legal suspensions that are delaying several large Brazilian infrastructure projects, including major hydroelectric developments.

Lula said November 6 that more than 20 major projects have been paralyzed or slowed, including the 11,182-MW Belo Monte hydroelectric project on the Xingu River in Para State (HNN 6/23/06), 1,087-MW Estreito on the Tocantins River in Para (HNN 11/23/05), and 3,580-MW Santo Antonio and 3,900-MW Jirau on the Madeira River in Rondonia State. (HNN 6/1/06)

The president’s office said Lula would meet with Transports Minister Paulo Sergio Pereira Passos and Mines and Energy Minister Silas Rondeau to hear their presentations on stalled projects. Then he planned to call Environment Minister Marina Silva and the directors of Ibama, the national environmental agency.

Lula decided to give priority to the projects during a government coordination meeting November 6. He is to make inspection trips of the projects.

Lula win opens way to renewed talks on 12,600-MW Itaipu

Paraguay President Nicanor Duarte said the re-election of Lula opens the way to renewed talks to renegotiate the debt of the 12,600-MW Itaipu hydroelectric project, operated jointly by Paraguay and Brazil on their common border.

The government of Paraguay has revealed discord in the handling of the debt, which the giant project owes to Brazil’s national utility holding company Centrais Eletricas Brasileiras (Eletrobras).

Duarte said talks had been suspended pending the results of the Brazilian election, and that Lula was committed to resume the dialog.

The Paraguayan government said Itaipu’s management company must pay 7 percent annual interest on its debt, indexed to inflation in the United States, beyond a tax of 5 percent. Duarte has said the interest rate agreement, which was adopted by previous governments, is a financial setback for Paraguay.

In September, Argentina announced it would exchange debt it is owed by the 3,200-MW Yacyreta hydroelectric project for a 40-year power supply from the project it co-owns with Paraguay. (HNN 9/20/06) Argentina uses almost all of the power generated by Yacyreta. Paraguay asked that the debt burden be reduced because it feels the interest was calculated unfairly.

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