The government has granted a preliminary green light to a massive Amazon dam project intended to prevent possible energy shortages, but also criticized as a potential environmental disaster.

Monday's approval from Brazil's environmental protection agency, Ibama, opens the door to bidding on the construction of multiple dams that would generate electricity and permit barges to navigate 2,600 miles (4,200 kilometers) to upstream tributaries in Peru and Bolivia.

Other permits must still be obtained before the estimated US$10 billion-US$14.7 billion (euro7.3 billion-euro10.8 billion) project gets under way, but the decision was a key step and is sure to prompt interest from big construction companies.

The government hopes to complete the Santo Antonio and Jirau dams on the Madeira River, a major Amazon tributary, by 2012. They are expected to produce 6,450 megawatts, or 8 percent of current electricity demand in Latin America's largest nation and economy.

"The government's decision is to build a model Brazilian hydroelectric project from scratch," acting Mines and Energy Minister Nelson Hubner said.

But Amazon experts warn that by flooding hundreds of square miles (kilometers) of one of the Amazon's most pristine areas, the dams will destroy swaths of the rain forest and its wildlife.

Scientists with the National Institute for Amazon Research have said the area to be flooded by the Jirau could be nearly twice the planned 204 square miles (529 square kilometers) and extend beyond Brazilian territory _ prompting protest from the government of neighboring Bolivia.

The dams also could lead to the extinction of ecologically and economically important fish species by blocking upstream migration of adult fish and grinding up larvae and fry heading downstream, environmentalists say.

Other potential problems include the increase of malaria-carrying mosquitoes, the advance of soy plantations into the rain forest and facilitating the movement of mercury from gold mining into the food supply of Amazon residents who survive on fish.

The government's Agencia Brasil news agency reported that Ibama imposed more than 30 restrictions on the dam project to reduce its environmental impact and relocate Brazilians living on land that would be swamped.

"It's a package of monitoring programs that looks for protection from Ibama and society so that the most complex issues will be monitored step-by-step during the process," Ibama president Bazileu Margarido told reporters in the capital of Brasilia.

The Amazon River basin covers 60 percent of Brazil. Although the government says deforestation in the area has fallen to its lowest rate since 1991, experts say as much as 20 percent of the rain forest's 1.6 million square miles (4.1 million sq. kilometers) has been destroyed by development, logging and farming.

Likely bidders for the dam project include leading Brazilian construction firms Norberto Odebrecht SA and Camargo Correa SA, Agencia Estado reported.

(Published by The Brazzilian, July 10, 2007)