ARGENTINEAN-PARAGUAYAN DAM (YACYRETA)
CASE NUMBER: 153
CASE MNEMONIC: YACYRETA
CASE NAME: Argentinean-Paraguayan Dam
A. IDENTIFICATION
1. The Issue
Since its beginning in 1973 the Yacyreta Dam project has increasingly come under
the scrutiny of the local communities in Argentina and Paraguay. The project has been
characterized as a "monument to corruption" and has shown costly overruns over the last
two decades. The project is unable to fill the dam to planned levels, and even if all
turbines are put into operation, they each can attain only two-thirds of the installed
capacity, due to the consequences that the full operation of the system could imply to the
environment and to the local communities. This is the result of the lack of accurate
assessment of needs and environmental damage, something that should have been
attended since the beginning of the project.
2. Description
Hydroelectric resources are vastly distributed around the world, and are without
doubt one of the most essential and feasible alternative sources of energy, particularly in
Latin America. Paraguay represents an example of a country with great hydroelectric
potential. The use of hydroelectric resources is widely recommended as an alternative
source of energy that implies much less contamination to the environment than other
sources (see Table 1). However, the effect that the hydro electrical projects have on
wilderness and wildlife is as harmful as any other source of energy. The cumulative
impact over the disappearing of the species is quite alarming, many species have been
driven into extinction or near extinction or near quite extinction by changes in their
habitats. Any major hydroelectric locks and dam project that plan to create deepwater
inland waterway are undertakings that will need all necessary environmental studies.
While energy development can promote progress, it can also be an enemy for the
environment. Throughout the world the promotion of energy development must be
undertaken with all the necessary steps to mitigate the damage that it could cause to the
environment. The development of energy must take in account the conservation of energy
and the creation of regenerative energy sources paying attention to the ecological
equilibrium of the system.
The impact of various energy sources on the environment can be divided in problems cause by
diminishing supplies of desirable materials (land impact, and wilderness impact) and pollution that
is an excessive supply of undesirable materials. The scale goes from less to greater impact,
from zero to four. Different kinds of energy show different effects on the environment.
Hydroenergy is among the sources that produces less pollution (air, water, visual and
noise), however its impact on land and wilderness is considerable. Compare with other
sources of energy on the table is the only renewal source and its environmental effects
are only surpass by natural gas. Oil and coal are among the most contaminated sources
of energy.
The Yacyreta locks and dam projects are slowly coming on line after twenty years
of costly overruns and poor planning. Yacyreta is a mayor low head hydroelectric project
on a reach of the Parana River, in the area of the Yacyreta island, where it forms the
boundary between Argentina and Paraguay. The Yacyreta complex is located about 400
kilometers downstream from Posadas(Argentina) and Encarnacion (Paraguay). The main
works consist of a dam, spillways, powerhouse and the associated infrastructures, and it
is considered the biggest civil engineering work under construction in the world. As well
as its power generating facilities, it has many peripheral activities including a navigation
lock, an international toll road, and a hotel. To figure the size of the complex in laymen's
terms, here are some figures:
* An annual power generation of 17500 Gwh (watts per hour), representing 30%
of current argentine supply, including all sources of generation;
* A flow, through each turbine of 2630 million liters per hour, equivalent to the
drinking consumption of Buenos Aires City over two days, or Asuncion City over 13 days;
* A reservoir surface of 1600 km: eight times the area of Buenos Aires and 13
times the area of Asuncion;
* A navigation lock allowing vessels to overcome a maximum difference in
elevation of 23 meters.
The project has 20 generators with an aggregate capacity of 2700 MW and will
generate about 17,500 GWh of electricity each year once the reservoir is operating at its
ultimate water level. By 1995 it is planned to raise the level to 78 meters, at which the
generators will produce a little over 70% of their rated output. At the end of 1998 the
level of the dam should raise to its ultimate design value of 83meters. The rate at which
the level can be raised is limited by the progress in various complementary works. The
construction of the dam and the consequent creation of the reservoir will have a
significant impact in the environment. The electrical output from the plan, once it is
completed, will be shared between the two countries, although it has always been
recognized that Paraguay's electricity requirements are small so that Paraguay will
require little, if any, of the output of Yacyreta.
The Yacyreta project is regulated by the "Entidad Binacional Yacyreta" (EBN) a
binational entity with legal, financial and administrative capacity and technical
responsibility for the study, design, supervision and execution of the construction of the
hydroelectrical project.
The construction of the Yacyreta dam, along with the construction of Itaipu (Brazil
and Paraguay) greatly affects the change of the Paraguayan landscape. The area is
changing very quickly, forests are being cleared and the most admirable aspect of
Paraguay's land, its virgin forests are disappearing, and no specific action has been
taken by the authorities regarding the gravity of the situation. See ITAIPU case.
There are many issues to be taken in account regarding the specific
characteristics of the Parana River and the regional landscape and the effect that the
construction and development of new dams and reservoirs have in the region. The
Parana River rises in the rainy areas of southern Brazil and drains most of those regions,
flows have been recorded at Posadas since 1901. The greater the development in the
area the greater the deforestation processes. (See Table 1)
Table 1: Average flows
Period of Hydrologic record
Average flow (m3/s)
1901-1978 1978-1992
11730 14670
Source: "Evaluation of options for the private sector participation in EBY." Nov. 1993.
The figures in Table 1 are a good basis to figure out the variability of the
run-off and the "hydrologic risk" associated with the normal operation of hydroelectric
resources on the river. Run-off records over the last fifteen years (1978-1992) show
15% increase above the average of the preceding 78 years (1901-1978). It is possible,
although there is no conclusive evidence to establish it as a fact, that the increased run
off is a net result of de forestation and can be relied upon as a sustained average
increase for future years.
The completion of the project, as it has been declared by Argentinean and
Paraguayan authorities, is well overdue. The works remaining to be done are principally
works in the electrical and mechanical equipment, the house and the small amounts of
civil engineering work, as well as the complementary works that are considered condition
sine qua non for the project to run at whole capacity, which is 83 meters.
The complementary works, fundamentals for the ecological and human equilibrium
of the project have been classified in three different programs: Resettlement and
rehabilitation Plan (PARR), Environmental Management Plan (PMMA), and the
Infrastructure Relocation Plan (IRP).
The main objective of the PMMA is to provide mechanism for prevention, control
and mitigation of the environmental consequence that the construction of Yacyreta will
have over ecosystems and communities. The area is characterized by high ecological
and social values. The diversity of biological species is an important characteristic of the
area. Regarding social values, the population depends greatly in the informal sector of
the economy and in the specific characteristics of the soil for the development of their
activities.
The main activities being currently developed are: monitors of water quality
during the transitional regime development and control of aquatic weeds in shore lake
environments; water quality and quantity at the spillways; control, flushing and
management of subreservoirs; fish migration; Management of important species, and
parameters for operation of the fish transfer facilities; control of in shore vegetation
outbreaks. The World Bank considered these activities as crucial issues. There is also
some conditionallity by the Bank towards the private investors in the project; private
investors are required to deposit U$s 201 million in escrow for fulfilment of the
environmental requirements out of the first four years revenues. There are some issues
defined by the Bank (lender for the project) as fundamentals and that need to be done in
the short time, as a prerequisite for the raising of the reservoir's water level: transfer of
fauna and wildlife; identification and preservation of archeological artifacts and sites;
study of alternatives for employment of the tile making communities (olleros) and
provision of appropriate living accommodation for relocated families.
The PARR program refers exclusively to the relocation of families affected by the
project. The reservoir will affect the environment of 10685 families, approximately 50000
persons once it is fully developed. The project not only will affect the settling of these
families but the creation of new economic activities, those are agricultural, industrial and
commercial ones. Deeply connected with the PARR is the IRP, which attends the
infraestructural needs of those affected by the relocation. (Morgan Grenfell & Co.)
Specialists think that the finalization of the Yacyreta project will provide with an
important source of energy to Argentinean citizens and industries. It will be by large the
largest single producer of electricity for the Argentinean market. Yacyreta's output will
have priority access to the market.
After the project is completed, Paraguay will be the largest exporter of
hydroelectric energy, an ironic fact considering that four out of ten Paraguayans do not
count with electricity. Paraguay's role in the Regional common market of MERCOSUR is
seen as the supplier of electricity to the region because of its tremendous hydroelectric
capacity. Paraguay still uses electricity for only 7% of its total energy needs. The country
is five times more dependent on oil, a commodity for which it has no known reserves.
Paraguay has to be able to use its tremendous electric potential domestically and not just
as a regional producer and exporter.
3. Related Cases
Keyword Clusters
(1): Trade Product = UTILity
(2): Bio-geography = TEMPerate
(3): Environmental Problem = HABITat loss
4. Draft Author: Daniela Perovic
B. LEGAL Clusters
5. Discourse and Status:
The Yacyreta project is being developed by the Entidad Binacional Yacyreta
(EBN), an entity set up by a bilateral treaty between Argentina and Paraguay, EBY is not
a commercial entity, nor a simple arm of either the government of Argentina or Paraguay,
but a biantional owned state enterprise. In 1990 the cost of the project had risen well
above budget and the two governments agreed to sign the Reversal notes to the Treaty,
to restructure some of the disposition sets up in the original treaty and to specify in
greater detailed payment and costs of the project.
6. Forum and Scope: ARGentina and BILAteral
7. Decision Breadth: 2 (Argentina and Paraguay)
8. Legal Standing: TREATY = National Law
C. GEOGRAPHIC Clusters
9. Geographic Locations
a. Geographic Domain : SAMER = South America
b. Geographic Site : SSAMER = Southern South America
c. Geographic Impact : Paraguay
10. Sub-National Factors: NO
11. Type of Habitat: [TEMP]
D. TRADE Clusters
12. Type of Measure: [REGST] = Regulatory Standard
13. Direct vs. Indirect Impacts: INDirect
14. Relation of Measure to Environmental Impact
a. Directly Related : YES [UTIL]
b. Indirectly Related : YES [WOOD]
c. Not Related : NO
d. Process Related : YES General [HABIT], Bio-diversity Loss [BIODIV],
Species loss [SPLL]
15. Trade Product Identification: POWER
16. Economic Data
Yacyreta represents an investment of $8 billion in constant price terms. The
project has been largely financed by loans from the World Bank and the Interamerican
Development Bank. By the early 1990's the cost of the project had gone up and the
Yacyreta's future needed revision.
17. Impact of Measure on Trade Competitiveness: MED
Paraguay is seen in the southern cone as a supplier of hydroelectrical energy due
to its tremendous hydroelectric capacity. Even with Yacyreta and Itapu dams, it still uses
only a small percentage of its total energy needs. Paraguay exports energy to Argentina
and to Brazil.
18. Industry Sector: UTIL in the (M) sector
19. Exporter and Importer: Paraguay and Argentina
The output of Yacyreta has priority access to the market. This applies to all its
output (Argentina and Paraguay). The original treaty established that the output from the
plant would be shared by the two countries, though it was always recognized that
Paraguay"s demands were much smaller, and that its requirements from Yacyreta would
be very small. Nevertheless, according to the original treaty Paraguay has the option of
selling the energy to Brazil and Argentina. Paraguay would not be paid more than $3 per
MWh by Argentina. Yacyreta will be the largest producer of Argentinean electricity, but
the market should be able to absorve all its output by the time all generators are
functioning.
E. ENVIRONMENT Clusters
20. Environmental Problem Type: Habitat loss [HABIT] Bio-diversity loss
[BIODIV] and Species loss land [SPLL]
Environmental damage is something that has not been treated with the necessary
seriousness in the design of the model, assessment of environmental damage was not
attended from the beginning. The same international groups that are now involved in the
environmental program were criticized in the past for lending money for the dam project
without any environmental impact studies.
The Yacyreta project is designed to achieve a level at Posadas and Encarnacion
at 83 meters above sea level. If this goal is achieved what eventually will be, in order to
claim success and efficiency of the project, it is necessary to achieve along with it the
relocation of inhabitants and the conservation of the local species.
There are also concerns regarding the capacity to regulate seasonal inflows and
control of floods, storage facilities exist upstream in Brazil and Paraguay but not in the
area of Yacyreta. Other environmental considerations required that a minimum steady
flow of about 600 m3/s be mantained in the waterways below Ana Cua spillway to
control the loss of local and regional bio-diversity, particularly among fish; decline in
biological productivity, specially fisheries and loss of landscape complexity. (Bureau of
National Affairs). Reservoir water quality and fish population are topics receiving
particular attention. Potable water supply and public health are also priorities among
environmental measures.
21. Name, Type, and Diversity of Species
Name: Many
Type: Many
Diversity: NA
22. Impact and Effect: HIGH and [SCALE]
23. Urgency and Lifetime: MEDium and 100 years
24. Substitutes: Greater conservation efforts [CONSV]
VI. OTHER Factors
25. Culture: YES
A problem very important in the design and success of the project is the relocation
of families and with it creation of new economic activities for them. These economic
activities are the primitive tile industry (olleros) and some agricultural ones. The "olleros"
production relays in a particular kind of clay found in the banks of the river. To resettle
this "olleros" it is necessary to find an area with similar geological characteristics to
provide economic activities to those families. The olleros rely for their production on clay
found on the river banks. In order to resettle the olleros , clay layers have to be
prospected, requiring detailed geological and economic studies, followed by land
adquisition, parceling and construction of infrastructure, all before the resetlement of
these people can take place. In Encarnacion (Paraguay) there is an important clay
deposit in the area of Mboi-Cae, source of economic activity for many "olleros" families.
Recovery and storage of the existing supply of raw material or discovery of alternative
deposits must be implemented to save this rural industry and the livelihood of the families
that depend on it. The tile industry is considered craft in that area and is a great source
of resources for the local people. Discovery of alternative deposits must be found to
save this rural industry and the likelihood of the families that depend on it.
26. Trans-Boundary Issues: YES
The Yacyreta Project could be considered within the frame of a larger and more
regional issue, the one of Hidrovia. The Hidrovia is a project that would deepen and
dredge a number of rivers to create an open navigation channel from Brazil northern
Paraguayan border to the South Atlantic shared estuary of Uruguay and Argentina.
Environmental impact studies have warned that without meticulous planning, the hidrovia
project could cause permanent damage to the pristine Pantanal Region of Brazil and
Paraguay. Low lying areas of Northern Argentina also could be flooded if reinforcement
work is not done on the banks. The Parana River's bed could be affected and as a result
it could affect not only Paraguay and Argentina but all the subsidiaries of that river.
27. Human Rights: NO
28. Relevant Literature:
References
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