Norte Energia consortium appeals court decision on Belo Monte

Monday, February 28, 2011

Brazil's Norte Energia has appealed against the decision of the justice department of the country's Pará state to suspend the start of construction at the 11.2GW Belo Monte hydro project, a source at the consortium told BNamericas.

"We expect the decision to be analyzed by the court and reverted soon," the source, who asked not to be named, said.

The ruling taken on February 25 halted works until all environmental conditions are met.

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The ruling also prohibits federal development bank BNDES from transferring financing for the project to the Norte Energia consortium, which won the rights to build and operate Belo Monte in April 2010.

Environmental regulator Ibama granted a preliminary license for the project on January 27. However, 29 of the conditions have not been met and another four were only complied with partially. There is no information on another 33 criteria, according to a release issued by the state justice department.

The preliminary license authorized the Norte Energia consortium to remove 238ha of vegetation.

In December, BNDES approved a bridge loan agreement of 1.08bn reais (US$650mn) for the construction of the project.

Environmentalists say the project will flood areas where indigenous tribes are based.

Brazilian federal energy planning company EPE said in a recent study that Belo Monte is set to cost 20.3bn reais.

Belo Monte will be built be built on the Xingu river and will be the world's third largest hydro plant and second biggest in Brazil, behind only the 14GW Itaipu Brazilian-Paraguayan plant.

The Norte Energia consortium is led by state-run utility Chesf, which holds a 49.98% stake. Other companies in the group include Queiroz Galvão (10.02%), Galvão Energia (3.75%), Cetenco Engenharia (5%), Mendes Júnior (3.75%), Serveng (3.75%) and J Malucelli (9.98%).

Belo Monte is expected to come online in 2015.