Export Credit

URGENT ACTION: Proposed Patagonia dams

URGENT ACTION: Proposed Patagonia dams

Created 11/19/2008 – 13:47


Probe International
Friday, November 21, 2008

Canada’s national pension plan (CPP) is a co-owner ofChile’s electricity transmission company, Transelec, and may soon do untold harm toChile’sPatagoniaregion at the southern tip ofSouth America.

Dear Probe International supporter,

You wouldn’t be surprised if I told you that the World Bank was financing a damaging dam in Laos, that Canadian aid had been used corruptly in Lesotho, or that Export Development Canada had bankrolled a polluting mine in Guyana. Such misuses of Canadian tax dollars have happened all too often and  Probe International supporters have been conscientious advocates for ethical and accountable Canadian expenditures in Third World countries.

But this will surprise you: the Canada Pension Plan, to which we all must contribute for our old age, has become a co-owner of Chile’s electricity transmission company, Transelec, and may soon do untold harm to Chile’s Patagonia region at the southern tip of South America. Helping to finance the Canadian investment in Transelec is our official export credit agency, Export Development Canada [1], itself financed by the good faith and credit of the Canadian taxpayer.

The details are reminiscent of the bad old days: a hydroelectric consortium of foreign companies is proposing to build five mega-hydroelectric dams in one of the most environmentally unique and untouched wilderness areas of the world. If the Chilean scheme isn’t stopped, it will dam two rivers fed by two massive ice fields, flood 5,000 hectares of rare temperate and cold rainforest and some of Patagonia’s best ranching lands, threaten the habitat of the Torrent duck and highly endangered huemul and pudu Andean deer, and forever degrade rivers that have been called the most beautiful on the planet.



“Where the Pascua begins”. Photo credit: International Rivers

As part-owner of Chile’s transmission company, CPP is backing a $2-billion transmission corridor that would be the world’s longest and probably cause more damage than the dams themselves. If built, it will bisect Chile, a long thin country, by transmitting the power 1,400 miles north to Chile’s cities and mining industry. This megaproject would require 5,000 high-voltage towers,  running through seismically active zones, over fjords, through volcanic areas, and affecting 14 national parks and protected reserves. CPP and its consortium partners (including Brookfield Asset Management Inc. and the British Columbia Investment Management Corporation) would have to clear-cut vast swaths of untouched biodiverse temperate forests with unique tree species. These include the endangered Guaiteca cipres and the Magellanic coigue (very old, diminutive–some even bonsai-like–trees growing on peat moss). Also threatened is the habitat of endangered fauna such as the Chilean river otter.

The hydroelectric conglomerate says the environmental problems caused by the dams can be addressed, but 30 official bodies including Chile’s National Energy Commission, National Water Directorate, National Geologic and Mining Service, National Forestry Service, and National Tourism Service have criticized the study for inadequate analysis, for an absence of key data, and for failing to meet Chile’s environmental standards.  Environmental organizations, some 50 strong, have denounced the environmental assessment, calling it a “sham” and a “fraud.”

Remarkably, no environmental assessment has been done for the transmission corridor yet. Through CPP, 17 million Canadians have become unwitting partners in this ill-conceived scheme that would cause widespread, irreversible environmental harm, is technically unreliable and environmentally risky, and would cost Chileans citizens dearly.





Baker River, Chilean Patagonia. Photo credit: International Rivers


Chileans need power to thrive and improve their standard of living but wrecking the environment with old-style dinosaur dams and unreliable long distance transmission corridors over rough terrain, all requiring monopoly control and government guarantees to protect earnings from the competitive, smaller-scale, decentralized sources of power is no way to do it. CPP has no business making hard-working Canadians involuntary investors in an environmentally damaging, uneconomic scheme that Chileans don’t want and that they are asking us to help stop.

If you agree that CPP should not be using your contributions this way, let Mr. David Denison, President and Chief Executive Officer of the CPP Investment Board [2] know. You can mail him at One Queen Street East, Suite 2600, P.O. Box 101, Toronto, Ontario M5C 2W5, Canada, email him at csr@cppib.ca [3], or call his office toll free at 1-866-557-9510.

To see the unique beauty [4] of Patagonia or to read about the good investments [5] that can be made to provide reliable and affordable power for Chileans, visit Probe International’s website at www.probeinternational.org [6].

And if you are able, please support our work to stop this dam scheme with a donation. We know how hard these times are for ordinary Canadians who have seen some of their personal savings and job security vanish overnight — many will not be able to support us this year. If you are more fortunate, and are able to help us to help protect the Chilean environment, we will appreciate whatever level of donation you can afford.

Yours sincerely,

Patricia Adams
Executive Director


For more information on the Canadian owners and financiers of Transelec, visit the following websites:

BrookfieldAsset Management: http://www.brookfield.com/ [7]

Canada Pension Plan Investment Board: http://www.cppib.ca/ [2]

British Colombia Investment Management Corporation: http://www.bcimc.com/ [8]

Export Development Canada: http://www.edc.ca/ [1]


See maps [9] of the Baker and Pascua rivers.

To view pictures of the proposed site to be dammed, visit our photo gallery [4]

To read the Environmental Impact Assessment [10] of the dams in Spanish, visit the Chilean government’s EIA website [11].



For further reports on the downside of big hydro projects as well as alternative electricity generation, see the following:

Big Hydro’s Market Failure in China [12]” by Grainne Ryder,  June 2007

The Three Gorges Dam: A Great Leap Backward [13]” by Patricia Adams and Grainne Ryder,  December 1999

Reforming Thailand’s Power Sector: Towards a Sustainable Electricity Future [14]” Probe International, November 1997

The Advantages of Combined Cycle Plants: A ‘New Generation’ Technology [15]” by Grainne Ryder, November 1997.

Economic Critique of Nam Theun-Hinboun Hydropower Project and Electricity Development in Laos: An Alternative Development [16]” June 1996.



Categories: Export Credit

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