Brazil has granted a licence for the construction of a controversial hydroelectric dam in the heart of the Amazon rainforest.
The $17 billion project on the Xingu River in the northern state of Para would help the fast-growing Latin American country cope with soaring demand for electricity but has raised serious concerns about its impact on the environment and native peoples.
500km.sq of land would be flooded by the Belo Monte dam.
Around half the area is already flooded naturally for part of the year during the rainy season.
'The environmental impact exists but it has been weighed up, calculated and reduced,' Brazilian Environment Minister Carlos Minc insisted.
The 11,000-megawatt Belo Monte dam is part of Brazil's largest concerted development plan for the Amazon since the country's military government cut highways through the rainforest during its two-decade reign starting in 1964.
Dams, roads, gas pipelines, and power grids worth more than $30 billion are being built to tap the region's vast raw materials, and transport its agricultural products in coming years.
The licence lists 40 requirements that must be fulfilled by the company that wins the bid to construct the dam - before it can begin building.
It includes more studies, construction of local infrastructure and maintenance of the local environment.
The winning bidder would have to pay 1.5 billion reais ($803m), the estimated cost of fulfilling these demands through public and private entities. It includes the cost of 'rehousing' an estimated 12,000 people who would be relocated.
Environmental groups say the Belo Monte project, which will also create a waterway to transport agricultural commodities grown in the Amazon, would damage the sensitive ecosystem and threaten some fish species.
