Brazil dam project ‘fails bank evaluation’

Unpublished

The controversial Belo Monte Dam, slated for construction in Brazil's Amazon region, does not meet the standards of an international framework used by the world's largest private banks to evaluate sustainability, according to human rights groups in Brazil.

In a letter sent to Itaú, Banco do Brasil, Bradesco, Santander, and Caixa Econômica Federal, 150 Brazilian social and environmental organisations warned that Belo Monte developer Norte Energia had not complied with the Equator Principles, a set of voluntary standards created in 2003 that aid private financiers in assessing and managing social and environmental risk in project finance.

As signatories of the Equator Principles, the five banks commit to not providing loans to projects where the borrower will not or is unable to comply with the Principles' respective social and environmental policies and procedures.

The five banks have been mentioned by the Brazilian government as possible co-financiers of the Belo Monte Dam, and at least one, Banco do Brasil, has been mentioned as the top-runner to co-finance nearly 20 billion reais that would be disbursed by the Brazilian National Development Bank (BNDES) to Norte Energia, stating that the project's rate of return is far below government estimates.

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