World Bank to finance controversial dam

The Pangue dam project has got the World Bank's approval for a large loan amidst charges of environmental violations.

Published: Saturday 04 July 2015

THE WORLD Bank has approved a $70 million loan to finance the 450-MW hydroelectric dam on Chile's biggest river, the Bio Bio.

The loan was sanctioned by the bank's International Finance Corp (IFC), which lends to the private sector, even before the Pangue dam's environmental impact assessment by the bank was complete. IFC also pre-empted a court ruling in a suit filed by environmentalists, contending the Pangue project is unconstitutional because it damages rights to property, life and a clean environment.

Opponents of the dam maintain it will threaten the culture and economy of the Pehuenche Indians, who live along the Bio Bio; and inflict ecological damage, such as harming downstream fisheries and adversely affecting river rapids that are world famous for kayaking and white-water rafting. In addition, the Pangue dam is expected to promote commercial logging, which will threaten the rich forests nearby and heighten the risk of seismic activity in a region rated the second most active in the world.

The Pangue dam, when completed in 1997, will supply 12 per cent of Chile's total energy needs. It is being built by ENDESA, the privatised electric company planning to develop the Bio Bio. But there has been little public discussion of energy alternatives. As a result, three cases have already been filed in Chilean courts to stop the project.

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