Update: On June 14, 2011, The Peruvian government announced that the massive Inambari Dam had been cancelled after years of strong community opposition. For 36 days leading up to this decision, close to 2,000 people in the Puno area had been on strike in an effort to convince the government to cancel mining concessions and the dam project. They blocked access roads to the region and held mass protests. Locals remain wary in spite of this desicion and we will continue to monitor any new developments.
If built, the massive US$4.9 billion Inambari Dam would form a reservoir of 410 square kilometers, second in size in Peru only to Lake Titicaca. The dam, slated to be built at the corner of Puno, Cusco, and Madre de Dios states, 300 km from the Brazil border, would be for export of electricity to Brazil, and would also send water during times of drought to Brazilian dams Jirau and San Antonio on the Rio Madeira.
The Inambari Dam is one of a series of hydropower projects to be built under the energy agreement signed by Peru and Brazil in June 2010, under which Brazilian companies will build and operate the dams for 30 years. Under this agreement, 80% of the dam's electricity would be exported to Brazil, necessitating a 1500 km transmission line to connect Peru's system with Brazil. Peru is responsible for financing the national interconnection, which is not included in the $4.9 billion price tag.
The consortium created to build the project on the Brazilian side are Inambari Geração de Energia (IGESA), comprised by Brazilian state companies Eletrobras and Furnas private construction company OAS, and Peruvian Empresa de Generación Eléctrica Amazonas Sur SAC(EGASUR SAC). These companies have stated they have received promises of a US$2.5 million loan from the Brazilian National Development Bank (BNDES).
Fifty small towns would be either underwater from the dam, or their economy and transportation harmed, and close to 15,000 people would be displaced. Most people are migrants from the highlands of Puno State, who began to arrive 50 years ago. The new comers began to grow cacao, pineapple, bananas, and manioc. Others do small-scale fishing, or artisanal gold mining along the Inambari. A100-km stretch of the Inter-Oceanic Highway (built by Brazil, not yet paid for by Peru) would also be flooded.
Communities from towns like San Gaban, which lies right where the dam wall would be built, have held numerous protests over several years now. Road blockades on main roads that give access to cities are regular occurrences, and signs of "No to Inambari Dam" can be found in many towns along the river.
The Native Federation of Madre de Dios River (FENAMAD), comprised of several indigenous groups and other downstream communities in Madre de Dios State, have demanded cancellation of the project. They say they have not been consulted, and are concerned about the risks of extinction that isolated native people would face. Downstream communities have been not made aware of the impacts that cutting off the river's flow would have on them.
The Bahuaja-Sonene National Park, a world natural sanctuary of high biodiversity, would also be threatened, as new roads are built, leading to increased colonization, forest burning, cattle ranching and large farms, hunting, and erosion of mountain sides.