Chile says no to $8bn hydroelectric project in Patagonia

Chile says no to $8bn hydroelectric project in Patagonia

Baker River, in the south of Chile, one of the streams that would have been affected by HydroAysen.

Chilean ministers unanimously voted Tuesday to revoke the environmental permit of the HidroAysen mega-dam in Patagonia, which would have tamed two of the world's wildest rivers and built more than 1,600 kilometers of power lines to supply energy to central Chile.

After a three-hour meeting, the country's ministers of agriculture, energy, mining, economy and health decided to “side with complaints presented by the community” and pull the plug on the hydroelectric project, environment minister Pablo Badenier was quoted as saying by local newspaper La Tercera (in Spanish).

The decision handed a victory to environmentalists who praised it as a landmark moment. The companies behind the project, Spain’s Endesa and Chile’s Colbun have 30 days from the moment they are officially notified of the decision to appeal the ruling, but experts believe it would be a very difficult obstacle to overcome.

Chile says no to $8bn hydroelectric project in Patagonia

"This project has many aspects that were poorly thought out, especially aspects related to local communities," Energy Minister Maximo Pacheco told reporters after the meeting (in Spanish).

Endesa and Colbun can still tweak the project or take its case to courts, which suggest more legal battling over the fate of the controversial project, which has triggered worldwide protests, may still be ahead.

Chile says no to $8bn hydroelectric project in Patagonia

Protests Against HidroAysen in Paris, May 2011.

Chile, the world’s top copper producer, suffers from a chronic energy shortfall that has begun affecting the competitiveness of its mining sector and cramping economic growth.

Experts say Chile needs to triple its current 18,000-megawatt capacity in the next 15 years, but the nation lacks domestic oil or natural gas resources. The dams were planned to generate a total of 2,750 megawatts, almost a third of central Chile's current needs, within 12 years.