The Peruvian government announced that the massive Inambari Dam, planned on a major Amazonian tributary, had been cancelled after years of strong community opposition. Close to 2,000 people in the Puno area had been on strike, blocking access roads to the region, to convince the government to cancel mining concessions and the dam project.

To appease the strikers, the government esta blished a high-level commission to review the Inambari Dam. After a tense meeting with local communities on June 13, Commission Chair and Vice-Minister of Energy Luis Gonzales Talledo definitively cancelled the project, stating that the Brazilian EGASUR consortium's rights to develop the project had been revoked.

"Although this resolution does not prevent the construction of all dams in the Inambari Basin, it is very important because it clearly cancels EGASUR's participation. The resolution states that all future proposed projects must be subjected to prior consultation with local communities according to ILO Convention 169 on Indigenous and Tribal Peoples, which is an important precedent," said Aldo Santos, from local NGO SER (Rural Educational Services).

For over three years, affected communities have opposed the Inambari Dam, which would flood 410 square kilometers of forest, including part of the Bahujan Sonene National Park buffer zone. The project would leave more than 15,000 people without agricultural lands and thus their main source of livelihoods. Flooding of 120 km of the recently built Inter-Oceanic Highway would sever access to markets and affect the economic development of the district of San Gaban and the province of Carabaya in Puno State.

"This is a great triumph for the communities and the Peasant Patrols (rondas campesinas), and we will continue to defend our lands and our culture. Even though the project is cancelled we know that we have won the battle but not the war. We know there are too many interests behind construction of Inambari, especially the interests of the Brazilians and their energy thirst said Olga Cutipa, President of the Front to Defend the Inambari-San Gaban.

The cancellation of the project is a blow to the Brazilian government, which signed an Energy Agreement with Peru last year committing to purchase electricity from six dams in the Peruvian Amazon. The US$4.9 billion Inambari Dam was expected to be financed by the Brazilian National Development Bank (BNDES) and to be built by Brazilian construction companies, sponsored by Brazilian energy company ElectrobrŠs. The recently-released Brazil Energy Expansion Plan for 2011-2020 includes a total of 7,000 MW of imported hydropower from the Peruvian Amazon. The Inambari Dam, which until now was at the most advanced stage of planning, was expected to produce 2,000 megawatts, equal to about a quarter of the country_Ž“s current installed capacity. The second proposed dam under the Brazil-Peru Agreement, the Pakitzapango Dam, was stopped in 2010 by an administrative legal action by the Central Ashaninka del Rio Ene, an indigenous organization.

Earlier this month, Peruvian NGOs demanded a public debate to review the Peru-Brazil Energy Agreement when the new Congress meets in July. In a communiqu‚, NGOs stated that "with the Agreement, we would be choosing to give away our energy to external markets at the expense of serious environmental and social impacts for the country. The approval of the agreement adversely compromises any serious effort to planning for long-term sustainable development of the country."

Although it has become clear that EGASUR will not build Inambari, Puno's population is still protesting the issuance of mining and oil concessions in the province.