Brazil Amazon dam seen having 10 pct return-media

* Amazon dam to have return above 10 pct – Eletrobras

* Room seen for cutting costs on the project

BRASILIA, May 15 (BestGrowthStock) – A controversial hydroelectric
dam in the Amazon rain forest will bring returns of more than
10 percent a year, Jose Antonio Muniz Lopes, chief executive of
Brazil’s state-controlled power utility Eletrobras told local
media on Saturday.

Eletrobras (ELET6.SA: ) and a group of Brazilian construction
companies won the bid to build the 11,000 megawatt Belo
Montedam in April amid criticism the project was an
environmentally hazardous money-loser.

Financial analysts say the government set an artificially
low price for the power to be generated by the dam, adding it
faces considerable risks including cost overruns and the
likelihood that protests will frequently halt construction.

“We want returns of above 10 percent, and we will manage
that,” Lopes said in response to a question about yearly
returns in an interview with O Globo newspaper.

Asked how that would be achieved given the size of the
investments foreseen, he said:

“There is a lot of room for the reduction of costs.”

Official estimates put the construction costs at 19 billion
reais ($10.5 billion) though private sector estimates go as
high as 30 billion reais ($16.6 billion) for the project.

Government leaders say the project, due to start producing
electricity in 2015, will provide crucial power for Brazil’s
fast-growing economy. But environmentalists and activists say
it will damage a sensitive ecosystem and displace around 20,000
local residents.

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(Reporting by Ana Nicolaci da Costa; Editing by Eric Walsh)

Brazil Amazon dam seen having 10 pct return-media