Hayley Stuart
In Bolivia, Indigenous groups fear the worst ...

The Bolivian government has revived a long-held plan to build a hydroelectric plant in a corner of the country’s western La Paz department, sparking concerns about the potential displacement of more than 5,000 Indigenous people from the area.

In Bolivia, Indigenous groups fear the worst from dam project on Beni River

Geodata does not ensure profitability of Chepete and El Bala

According to this Spanish-language blog post from the Fundacion Solon, the mega hydroelectric plants of Chepete and El Bala are presented as the future of Bolivia, as the first step to turn Bolivia into the energy heart of South America, as the new export business that will generate an income of 1,250 million dollars a year and that It will alleviate the fall in gas prices and reserves. However, the “Product 4: Socio-economic Financial Assessment Study” that is part of the “Identification Study” prepared by Geodata during the years 2015-2016 shows an extremely uncertain and dangerous scenario in economic terms.

In relation to the mega-hydroelectric power plant in El Bala, Geodata recommends postponing its construction for 20 years “until the conditions of the energy market in Bolivia and abroad indicate the convenience of its implementation” (Annex 1: Budgets and energy costs, page 22). All the data provided by Geodata shows that if this hydroelectric plant were built today, it would be deficient and would result in a loss of several tens of millions of dollars. El Bala's electricity generation costs reach $ 81 (USD) per Megawatt hour (MWh) and the average price at which Brazil bought hydroelectric power during the last decade is USD 52 per MWh.

As for Chepete, Geodata states on page 43 of the document "4.2: Financial economic evaluation" that the profitability of the project depends on a "base rate" of USD 70 per MWh. In other words, Bolivia should have a purchase contract by Brazil for USD 70 per MWh for the next 50 years. According to Geodata, the energy cost of Chepete is USD 55 per MWh. It is striking that Geodata does not make any analysis of the real possibility that the purchase price in Brazil will rise to USD 70 per MWh for the period 2025-2075. The entire study on the benefits of Chepete is based on a desire, on an assumption about the purchase price that is not substantiated or demonstrated throughout an "Identification Study" that cost more than three million dollars to the country. The Geodata study does not give any confidence, certainty and less guarantee about the profitability of Chepete and directly rules out the viability of El Bala. Investing more than six billion dollars and doubling the country's current foreign debt in a business that has such an uncertain prognosis, to say the least, would be a serious mistake. It is essential to promote a broad national debate to transparent all the information on these mega projects and to analyze with feasibility their viability. A mistake "in the largest investment in the history of Bolivia" as stated by the government would be catastrophic for the future of the country in the 21st century.

The report can be accessed here

A set of slides prepared by Fundacion Solon can be accessed here.

The case of Chepete and El Bala

According to this Spanish-language blog post from the Fundacion Solon, the Chepete reservoir would cover 677 square kilometers (km2), and that of El Bala would cover 94 km2. Both reservoirs would flood a total of 771 km2—5 times larger than city of La Paz. In total, 5,164 people would be relocated, the majority of them indigenous. In the area there are 424 species of flora, 201 species of terrestrial mammals, 652 species of birds, 483 species of amphibians and reptiles and 515 species of fish. Geodata confirms that “High concentrations of sediments could affect the operation of various structures such as catchments, pipes, reservoirs, turbines, and other components, due to the accumulation and abrasive effect of solids." Reservoirs, roads and power transmission lines will generate deforestation in excess of one hundred thousand hectares. The environmental files do not quantify the greenhouse gas emissions that would be caused by the loss of thousands of trees. The environmental files also do not discuss many environmental concerns such as mercury concentration in the reservoirs, impact on human health caused by stagnant waters, and the impact of the Chepete and El Bala dams downstream and throughout the entire sub basin. Several territories of indigenous peoples and nations that inhabit the area would be flooded or affected in their free movement. That is the case of the Community Territories of Origin of Mosetenes, Chimanes, Lecos, Tacanas, Uchupiamonas and others that are legally recognized within the Plurinational State of Bolivia.

Economic inviability of Chepete and El Bala

According to the analysis presented in this Spanish-language blog post by Fundacion Solon, the total cost of the Chepete and El Bala mega-dams plus the transmission line to Brazil, according to the environmental records, would be over 9,000 million dollars—essentially doubling Bolivia’s national debt.

Geodata’s estimate of the cost of generating electricity by the planned mega-dam El Bala is $81 per MW/h—much higher than the current cost of electricity for Brazil of 52 MW/h. Geodata therefore recommended that the development of the El Bala 220 hydroelectric power plant be postponed, until the conditions of the energy market in Bolivia and abroad indicate the convenience of its implementation ”.

Why mega hydroelectric extractivism?

This Spanish language post by Fundacion Solon explains how Bolivia started considering mega-dams as a solution to economic concerns. “But not only are the prices and revenues of the gas exported to Brazil and Argentina falling, but also the natural gas reserves are falling. Domestic consumption of natural gas is increasing and it is not possible to think of a substantial increase in export volumes in the short term. The situation is so serious that in July 2016, Argentina applied a fine of $ 2,224,068 to Bolivia for failing to comply with the supply of gas to the neighboring country.”

“The fall in revenues from gas exports has an economic and political impact. The dominant logic during the last decade has been that of a gas exporting State that distributes income between the regions and the Bolivians, through a series of social mechanisms and programs. The strength of the government depends on its ability to distribute those monies that come from the extraction and export of gas. The radical decrease in these revenues opens not only an economic crisis but a political crisis in the country. The "godfather" state would no longer be sustainable. To compensate for the fall in gas export revenues, the government seeks to build several mega hydroelectric plants that would export electricity to neighboring countries. The plan is to move from an installed capacity of 1,600 MW to 13,382 MW until 2025…

The investments needed to build these mega hydroelectric plants will exceed 25,000 million dollars and will mark the future of Bolivia for the next 50 years."

Solar Disruption vs. Mega Hydroelectrics

Fundacion Solon has shared the Spanish-language presentation “Solar Disruption in Bolivia” prepared by Pablo Solón for the XXXVII version of the Marcelo Quiroga Santa Cruz Free Chair of the UMSA that was held on March 3 in the University Paraninfo of the UMSA with the Support from the UMSA Rectorate, the Social Communication Career and the Solón Foundation, and with the participation of Catalan ecologist and economist Joan Martínez Alier and Alex Villca from San José de Uchupiamonas of Madidi Park.

The presenters recommended that geothermal be replaced with solar, wind and small hydroelectric to ensure that: a. gas reserves last longer, b. gas volumes are met committed to export, C. fines are avoided and d. the country's income is expanded as said gas will be sold without the subsidies that exist for the domestic market. They concluded that overcoming extractivism requires a alternate plan to the national agenda.

As water scarcity deepens across Latin America, political instability grows

According to this article in the Guardian, “mega dams, agribusiness and climate change have all affected water supplies, say grassroots groups.”

Pablo Solon, Bolivia’s former ambassador to the UN in global climate change is quoted as saying “Cities are vulnerable to climate change but government policies are making climate change worse…. “There has been a huge development of extractive industries, like soya, mining and mega dams. There has also been a lot of deforestation. These have all worsened the water situation and made Bolivia, and other Latin American countries, more vulnerable to climate change.”

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The Growing Resistance to Megadams in Bolivia

The Growing Resistance to Megadams in Bolivia

A growing resistance to the Chepete/ El Bala megadam is challenging President Evo Morales’s plan to convert Bolivia into South America’s leading energy powerhouse. Last November, representatives of 17 indigenous communities held a vigil at the site of two megadams—El Chepete and El Bala—that President Evo Morales plans to build in Bolivia’s Amazonian region. The protesters blocked access to the site by Geodata, the Italian firm hired by the government to study the dams’ feasibility. Twelve days later, Geodata’s engineers withdrew their equipment, announcing, “If there’s no [community] consensus, the conditions don’t exist for us to work.”