Environmentalists and tribal leaders oppose massive flooding, while Brazil minister states 'not a single Indian will be displaced'

This article is more than 10 years old

This article is more than 10 years old

The Brazilian government has given the green light to the construction of a controversial hydroelectric dam in the Amazon rainforest that environmentalists and indigenous activists claim will displace indigenous tribes and further damage the Amazon basin.

Brazil's environment ministry granted the Belo Monte dam project an environmental licence late on Monday paving the way for tenders from companies interested in constructing the world's third largest hydroelectric plant, on the Amazon's Xingu river.

According to the Brazilian energy ministry the dam, expected to start production in 2015, will cost around R$20bn (£6.8bn) and will eventually produce around 11GW of electricity.

But environmentalists and indigenous leaders have strongly apposed the plans, which the government admits would see around 500 sq km of land flooded and activists believe would see thousands displaced.

"We want to make sure that Belo Monte does not destroy the ecosystems and the biodiversity that we have taken care of for millennia," Megaron Tuxucumarrae, a leader of the Kayapo Indians said. "We are opposed to dams on the Xingu and will fight to protect our river."

The proposed construction of the Belo Monte dam in the Amazon state of Para is part of a major government investment drive to help the country keep up with soaring energy demand from a rapidly expanding economy, while curbing greenhouse gas emissions. Hydroelectric power produces no direct carbon dioxide.

Brazil's environment minister Carlos Minc said the winning company would be forced to spend around $800m (£501m) offsetting the environmental damage caused by the project.

"There is not going to be an environmental disaster," he told Brazilian television.

Minc denied Indians would be forced from their traditional lands by the dam. "Not a single Indian will be displaced. They will be indirectly affected, but they will not have to leave indigenous lands," he said.

Roberto Messias, head of Brazil's environmental agency Ibama, said that around 12,000 people were likely to be affected by the construction but that many of them currently lived in wooden riverside shacks and were likely to benefit from the dam's constructions.

"Our studies show that today the population does not have adequate sanitation or healthcare. The conditions outlined in the licence are designed so that the local population have a superior quality of life … at the end of the construction," he said, according to the Amazon paper Diario do Para.

Plans to build hydroelectric dams on the Xingu river have existed since the 1970s but have repeatedly failed to materialise, partly as a result of fierce pressure from environmental groups and activists, including the musician Sting.

• This article was amended on 17 February 2010. The original referred to 11,000GW. This has been corrected.