Rucalhue Dam is a 90 MW hydro project on the middle Biobío River in Chile, now under construction despite years of community resistance, serious concerns about Indigenous and river rights, and the growing influence of Chinese and US strategic interests over Latin America’s energy and minerals. Around this conflict, new tools and proposals like reservas de caudal (environmental flow reserves), rights‑of‑river declarations, and a river protection law are emerging from places like Chile’s Queuco, a tributary of the Bíobio River; Puelo and Futaleufú Rivers in Patagonia, offering a very different vision of how rivers should be governed.
Rucalhue: a new dam on an exhausted river
The Biobío River has long symbolized both the power and the costs of Chile’s hydroelectric development model. Once a largely free‑flowing river, it is now heavily fragmented by large dams such as Ralco, Pangue, Angostura and Palmucho, which have altered flows, flooded Pehuenche territories and reshaped entire ecosystems. Into this already exhausted basin comes Rucalhue
Rucalhue is being developed by Rucalhue Energía SpA and is controlled by China International Water and Electric (CWE), a subsidiary of the state‑owned China Communications Construction Company (CCCC) . If completed, it would become the fifth hydroelectric project on the Biobío, adding yet another barrier to a river that has already been treated more as an energy corridor than as an ecosystem with intrinsic value and cultural meaning. The project received its main environmental approval in 2016, but its path has been contested from the start. In 2020, the company introduced design changes, including new access roads and a “safety zone,” which were allowed without a full new environmental impact assessment – a decision heavily criticized by communities and organizations who argue that this sidestepped a proper review of cumulative impacts in a basin already saturated with dams.
Biobío river – credits: Defensa Ambiental
In October 2023, Chile’s forestry agency CONAF declared Rucalhue a project of “national interest,” a crucial step that enabled a special forest management plan allowing the felling of vulnerable native species such as guindo santo and naranjillo in exchange for compensatory replanting and habitat measures. In June 2024, the company signed an engineering, procurement and construction (EPC) contract, and in August 2024 construction formally began, with an estimated 40‑month build time that could see the project operating towards the end of this decade.
Supporters of Rucalhue argue that the project will contribute to Chile’s 2030 and 2050 climate goals by adding non‑fossil electricity to the grid and improving energy security in a context of rising demand. From a narrow carbon‑accounting perspective, a 90 MW hydro plant can help displace some thermal generation. Yet, this framing ignores the basin’s saturation by dams, the availability of less destructive renewable options and deepening concentration of climate risk, and the fact that decarbonization pathways do not require sacrificing the last free stretches of already fragmented rivers. The question is not simply “hydro or fossil fuels,” but what mix of renewables, efficiency and transmission investments can meet climate goals without deepening historical injustices and ecological damage in places like the Biobío.
Indigenous rights, community resistance and escalating conflict
To understand the depth of opposition to Rucalhue, it is important to recall the history of the Biobío and its Indigenous Peoples. In the upper and middle basin, Mapuche‑Pehuenche communities have resisted dams for decades, particularly during the construction of Ralco and Pangue, which led to forced relocations, loss of sacred sites and long‑lasting social conflict.
In 2004, after years of struggle, the Chilean state signed a friendly settlement with Pehuenche families before the Inter‑American Commission on Human Rights. In that agreement, the state committed to refrain from authorizing new large infrastructure projects, especially hydroelectric dams, on defined Indigenous territories in the upper Biobío, acknowledging the serious harms caused by earlier projects. There is debate today about how far those protections extend downstream and how to interpret the exact geographic scope of the agreement. Human rights experts, including the UN Special Rapporteur on human rights and the environment, argue that authorizing Rucalhue breaches at least the spirit, and arguably the terms, of that settlement, because it continues a pattern of imposing major hydro projects on Mapuche‑Pehuenche lands and waters without full respect for their rights and self‑determination. Even where legal boundaries are contested, the underlying obligation is clear: not to repeat the harms that gave rise to the settlement in the first place.
Local opposition to Rucalhue dates back at least to 2013 and has taken multiple forms. Residents and community organizations have organized protests, lodged complaints and pushed for consultations; in a 2021 municipal consultation in Quilaco, an overwhelming majority of participants rejected the project, sending a clear message that the dam lacked local social license. Actions on the ground have included road blockades and the occupation of project sites to halt works and draw national attention to the conflict.
The institutional response has combined slow bureaucratic processes with hard security measures. Communities report repeated police evictions, criminalization of young activists and the presence of private security forces, contributing to fear, fatigue and fragmentation among residents. In April 2025, the conflict took a darker turn when armed individuals attacked the construction site, burning vehicles and equipment, in an incident widely covered by the press and linked to broader tensions and militarization in Mapuche territories in southern Chile.
Environmental flows, “run‑of‑river” and the meaning of reserva de caudal
On official documents, Rucalhue is described as a run‑of‑river dam with mitigation measures and compensation plans. Technically, run‑of‑river projects differ from large storage dams such as Ralco: they typically create smaller reservoirs and have a lower greenhouse gas footprint. This has led to the misconception that run‑of‑river plants are low-impact. Rucalhue, for its part, comes on top of four major projects that have already upended flows, sediment transport and ecological connectivity. In a basin this fragmented, a project like Rucalhue can tip key stretches over ecological and cultural thresholds, especially when cumulative effects are poorly evaluated and minimum‑flow standards are treated as a checkbox rather than as a serious tool for basin‑wide protection.
In Chilean water law, the concept of reserva de caudal (water or flow reserve) is a legal mechanism that allows the state to set aside part of a river’s flow for specific purposes, effectively restricting the granting of new consumptive water rights. Following the 2022 reform of the Water Code, this tool has evolved into a powerful instrument for ecosystem preservation and the protection of local uses, legally “taking water off the table” to ensure ecosystem and population needs. However, because these reserves are established by presidential decree, they remain vulnerable to administrative reversal, highlighting the need for even stronger statutory protections, such as a national river protection law to ensure that these safeguards cannot be easily undone.
While reservas de caudal are not a magic solution, they address a critical tension: in a drought-prone country, reserving water for ecosystems is often misperceived as a threat to irrigation or drinking water. In reality, as seen in the Futaleufú and Puelo basins, these reserves are calibrated to safeguard key flows while integrating with basin planning and climate adaptation measures. By protecting baseflows and seasonal patterns, these reserves actually strengthen long-term water security, maintaining aquifer recharge and water quality, rather than sacrificing these essential functions for new, high-impact extractive projects.
It is worth noting that in China itself, environmental flow and river protection ideas have advanced significantly over the last two decades. National policies now use ecological flow standards, strict water use caps and integrated zoning instruments such as the “Three Lines, One Permit” framework, and laws like the Yangtze River Protection Law explicitly strengthen ecological requirements for hydropower and other river uses. Yet Chinese state‑owned companies investing abroad, including in projects like Rucalhue, operate under host‑country rules that are often weaker or more fragmented than the frameworks emerging inside China, and they have been associated with dams that rely on minimal flow numbers and limited cumulative impact analysis in Latin America and elsewhere. This contrast underlines why Chile cannot simply trust foreign “best practice” to protect rivers: robust tools such as reservas de caudal, rights‑of‑river frameworks and a strong river protection law must be defined and enforced by Chilean society to secure meaningful environmental flows in basins like the Biobío.
Seen from this perspective, Rucalhue has become a test case for whether Chile will move from minimal compliance, narrow minimum flow conditions on individual dams, to something closer to a genuine reserva de caudal approach in heavily impacted basins. The question is whether the state will continue to approve new projects based on technical minimum flows, or adopt basin‑level protections that reserve remaining free stretches and flows for ecological and cultural purposes.
Queuco River: building a reserva de caudal from below
Just upstream, one of the Biobío’s last free tributaries tells a different story. The Queuco River, in Alto Biobío, remains largely free‑flowing and is central to the life, culture and spirituality of local Pehuenche communities. A coalition involving Defensa Ambiental, Maben Leubü, Earth Law Center, and International Rivers, together with local communities, is working to secure a formal reserva de caudal for the Queuco that keeps its waters out of the hands of future large hydro or extractive projects. This initiative aims to use existing legal tools in a new way, combining them with emerging concepts such as the rights of rivers. Under a Queuco reserva de caudal, part of the river’s flows would be legally reserved for ecosystem function and community uses, preventing new consumptive water rights that could enable dams, diversions or intensive extraction. The goal is not only to keep the Queuco free‑flowing, but also to affirm the Pehuenche relationship with the river and to recognize the Queuco as a living entity with its own value.
The Coalition frames the Queuco work as part of a broader rights‑of‑rivers strategy in Chile, linked to the Declaration of Rights of the Biobío River and to proposals for river guardianship where community representatives, organizations and authorities share responsibility for the river’s protection. If the Queuco reserva de caudal is achieved, it would become a powerful example of how communities and allies can use legal instruments to protect a free river in a basin otherwise dominated by dams.
Futaleufú and Puelo: Chile’s First Ecological Water Reserves
The campaign for the Queuco is gaining strength thanks to recent precedents in southern Chile. After years of advocacy work by local organizations, including Futaleufú Riverkeeper, Puelo Patagonia, and Ríos Protegidos, the Ministry of Public Works and the General Directorate of Water (DGA) declared the first water reserves for ecosystem preservation in the Futaleufú and Puelo river basins.
According to Futaleufú Riverkeeper, the new reservas de caudal are designed to keep the river free‑flowing, secure water for local communities and nature, and create a legal buffer against future projects that would threaten its ecological integrity and recreational value. The decrees must still be fully implemented, but they mark an important shift. For the first time, the Chilean state is reserving river flows specifically for ecosystem preservation, not just for extractive or energy uses. By pointing to Futaleufú and Puelo, it becomes clearer that Chile can choose to lock in protection for key rivers by reserving their flows, rather than waiting for conflicts to explode around each new dam proposal.
River protection and a law for Chile’s rivers
At the national level, Chilean civil society is pushing to change the rules of the game. Organizations grouped in the Ríos Protegidos coalition have been promoting a national river protection law, already under discussion in Congress, that would create binding mechanisms to designate and safeguard rivers of high ecological and cultural value. In this sense, Article 4 of the draft bill, on prohibitions and limitations, is key: it only allows sustainable use activities in the area of a protected river—according to the definition in No. 32 of Article 3 of Law 21.600—and it bans activities that significantly affect the river’s different levels of connectivity, the quantity and quality of its waters, or the integrity of its banks.
Legal commentaries on recent environmental developments in Chile emphasize that inland waters still lack adequate protection and that instruments like a river protection law, combined with tools such as reservas de caudal and rights‑of‑river declarations, could fill that gap if they are implemented with sufficient ambition and resources. For advocates, the point is to move from a reactive model, fighting dams one by one after they are proposed, to a proactive model that designates certain rivers as off‑limits for new large infrastructure, much like national parks restrict certain types of exploitation on land.
A crossroads for the Biobío and beyond
Taken together, the pursuit of the Rucalhue dam, on the one hand, and innovations on the Queuco, Futaleufú, Puelo and the river protection law, on the other, represent two very different paths. One path deepens the model that gave us a heavily dammed Biobío: prioritize energy projects justified by national development and global energy transition narratives, even when they rest on contested legal interpretations, weaken Indigenous rights and push ecosystems beyond their limits. The other path scales up tools like reservas de caudal, rights‑of‑rivers declarations and robust legal protection for free‑flowing rivers, recognizing them as subjects of care and as critical ecological and cultural infrastructure in their own right.
Rucalhue shows what is at stake when decisions are made within the old paradigm: a new dam on an already exhausted river, pushed forward in the name of security and development, even as local communities and international experts warn of rights violations and irreversible damage. Queuco, Futaleufú and Puelo show that another approach is possible: one that reserves water for life, not only for kilowatts, and that uses law to keep free rivers free.
For Chile, and for many countries in Latin America, the challenge is clear. In the coming years, the region will be under intense pressure to supply energy and minerals for the global transition away from fossil fuels. The question is whether this transition will repeat the old extractive patterns, or whether it will be used as an opportunity to recognize rivers as living beings, uphold Indigenous and community rights, and redesign water governance so that reservas de caudal, river protection laws and rights‑of‑river frameworks are at the center rather than at the margins.
That choice will be written, quite literally, in the flows and futures of rivers like the Biobío.