Alto Maipo Hydroelectric Power Project (IADB-CH-L1067)

Countries
  • Chile
Geographic location where the impacts of the investment may be experienced.
Specific Location
Cajon del Maipo
Whenever identified, the area within countries where the impacts of the investment may be experienced. Exact locations of projects may not be identified fully or at all in project documents. Please review updated project documents and community-led assessments.
Financial Institutions
  • Inter-American Development Bank (IADB)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Active
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
A
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Oct 16, 2013
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
Alto Maipo, SpA
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Hydropower
The service or industry focus of the investment. A project can have several sectors.
Potential Rights Impacts
  • Healthy Environment
  • Labor & Livelihood
  • Marginalized Groups
  • Right to Health
  • Right to Water
Only for projects receiving a detailed analysis, a broad category of human and environmental rights and frequently at-risk populations.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 270.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Project Cost (USD)
$ 2,053.30 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Bank Documents
Other Related Projects
Primary Source

Original disclosure @ IADB website

Updated in EWS Jun 15, 2020

Disclosed by Bank May 30, 2008


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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

The Alto Maipo Hydroelectric Power project consists of the design, construction, operation and maintenance of two run-of-the-river hydroelectric plants (in hydraulic series) for a total of 531MW, to be located in the Maipo River Basin, 50 km southeast of Santiago, Chile in the San José de Maipo district.

Early Warning System Project Analysis
For a project with severe or irreversible impacts to local community and natural resources, the Early Warning System Team may conduct a thorough analysis regarding its potential impacts to human and environmental rights.

Currently under construction, the Alto Maipo Hydropower Project (PHAM) is described as a run-of-the-river (ROR) project, which uses the natural flow of a river to generate electricity without the construction of a dam. In this case, however, the impacts on the watershed will be immense, at a scale unheard of for a typical ROR project. The waters of the Maipo's three principle tributaries will be diverted for more than 100 kilometers, passing through 67km of tunnels bored through the Andes Mountains. This will dramatically affect the water flows of the Maipo River, of its major tributaries and the underground aquifers, and cause large-scale damage to water access, farming, tourism and the environment.

The construction period was supposed to be approximately five-years, but has been extended repeatedly; estimated costs are now more than four times greater than when the project began. Major investors and contractors pulled out of the project in 2017, and the company faces a series of sanctions for violations of environmental regulations.

In recent years, more than 15,000 people, representing close to 100 community organizations, marched demanding the project's cancellation, calling instead for the protection, conservation and restoration of this critical watershed. The No Alto Maipo campaign has become Chile’s second largest environmental cause due to its broad media outreach and the diversity of participating organizations.

Complaints have been filed at the accountability mechanisms of the IDB and the IFC.

People Affected By This Project
People Affected By This Project refers to the communities of people likely to be affected positively or negatively by a project.

The Maipo river basin is east of Santiago and the Maipo river is the most important river for the capital city. Despite being promoted as a project to serve the public interest, the project will cause extreme hardship for the residents of the Cajón del Maipo and for Santiago’s population of 7 million. The project’s severe – and likely irreversible – impacts were not properly evaluated. This includes:

-Dramatic limitations on water access: As a very large-scale ‘run-of-the-river’ project, it is estimated to reduce the Yeso, Volcán and Colorado Rivers by up to 60%. These rivers, the main tributaries in the upper reaches of the Maipo river watershed, are the main source of drinking water for the residents of Santiago, and irrigate more than 120,000 hectares of farmland.

-Significant erosion: The project will cause significant erosion to the riverbed, affecting private and public infrastructure, including many intakes for drinking water, irrigation, bridges, and other waterways.

-Desertification: In the last 10 years, Chile has suffered long-term historic droughts so extreme that the country’s northern and central regions are now experiencing a process of desertification – a process exacerbated by mining, construction, cattle-rearing, plantations, firewood extraction, and other activity. The Maipo watershed serves a unique and indispensible role in regulating local climate and alleviating air pollution in Santiago. The Alto Maipo project, in further diminishing the flow of water, is likely to accelerate the region’s desertification process.

-Impacts on protected areas and tourism: Chile’s Cajón del Maipo is home to the Glacial Natural Monument (1994), two Nature Sanctuaries (1995 and 2008) as well as other protected areas. There is concern that highly valued ecological and cultural assets could be at risk, as well as their rich paleontological and archeological elements. Furthermore, the project could cripple the valley’s value as one of the most important recreational and tourist areas in Chile, receiving millions of national and foreign visitors a year.

-Human rights at risk: According to the Chilean National Institution of Human Rights and international experts, the project puts several human rights at risk including the right to water, the right to live in a healthy and clean environment, the right to develop sustainable local economic activities, the right to information and participation, among others.

Read more at:
http://www.ciel.org/project-update/alto-maipo-hydroelectric-project-threat-chiles-environment/
http://www.riosdelmaipo.cl/

Investment Description
Here you can find a list of individual development financial institutions that finance the project.
Private Actor 1 Private Actor 1 Role Private Actor 1 Sector Relation Private Actor 2 Private Actor 2 Role Private Actor 2 Sector
- - - - AES Corporation Parent Company -
- - - - AES Gener S.A. Client -
- - - - Strabag SE Contractor -

Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

ACCOUNTABILITY MECHANISM OF IADB

The Independent Consultation and Investigation Mechanism (MICI) is the independent complaint mechanism and fact-finding body for people who have been or are likely to be adversely affected by an Inter-American Development Bank (IDB) or Inter-American Investment Corporation (IIC)-funded project. If you submit a complaint to MICI, they may assist you in addressing the problems you raised through a dispute-resolution process with those implementing the project and/or through an investigation to assess whether the IDB or IIC is following its own policies for preventing or mitigating harm to people or the environment. You can submit a complaint by sending an email to MICI@iadb.org. You can learn more about the MICI and how to file a complaint at http://www.iadb.org/en/mici/mici,1752.html (in English) or http://www.iadb.org/es/mici/mici,1752.html (Spanish).

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