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Background Materials: Case Studies

These can be used to summarize the most interesting or newsworthy aspects of longer documents, studies, or on-going stories.

(Below is one of a series of documents used to highlight individual World Bank projects, and allude to an overriding, institutional problem in lending or development activities.)



WHAT: Yacyreta Dam on the Parana River, running through Argentina and Paraguay.

STATUS: Construction on the Yacyreta dam began in 1983. As of 1998 it is still incomplete.

MAJOR ISSUES: Resettlement, public information disclosure and environmental destruction.

SIZE: The Dam is 83 meters high and 67 kilometers long, making it one of the largest and most complex construction projects ever undertaken in Latin America. The reservoir will eventually inundate 1650 square km, creating a reservoir 250 km long.

LOCATION: The Yacyreta Hydroelectric Dam straddles the Parana River, which forms the border between Paraguay and Argentina.

CAPACITY : If it is ever completed, it should generate 3,100 megawatts of electricity for mostly urban areas of Argentina.

COSTS: Current estimates of the costs to complete the project run at $8 to $10 billion. Original estimates were $1.35 billion. It has already received over $1.74 billion in loans from the World Bank and the Inter-American Development Bank.

ENVIRONMENTAL IMPACTS: Dam will flood over 80,000 hectares of land in Paraguay and 29,000 hectares in Argentina, including 30,000 hectares of forest, several large and small islands, marshes and grasslands.

98 percent of land to be flooded is classified as "biologically unique wildland natural ecosystems".

Irreversible disruption of aquatic biodiversity and fishery resources upon which a sizeable human population depend.

Severe pollution of the urban waterfront areas and the reservoir generally from untreated sewage, industrial, and agricultural wastes that contaminate the stagnant reservoir.

Stagnant waters created by the reservoir pose health hazards to people living in low areas because of a lack of sewage treatment and pollution from a slaughterhouse in the city of Encarnacion.


  • Thousands of residents have lost their jobs and at least 50,000 people will be displaced.
  • Severe health risks from malaria, schistosomiasis, and other diseases.
  • Interruption or complete loss of livelihoods of local people, including breadmakers, fishermen, and brickmakers.
  • Increased poverty due to persistent delays with resettlement and appalling lack of attention to regional economic development.
In February 1998, protesters demanding a meeting with the Paraguayan project head were attacked by riot police commissioned by the project's implementing agency.


In 1997, the World Bank Inspection Panel confirmed the allegations of violations of Bank resettlement and environmental policies. It also asserted that "a number of issues raised should have been dealt with by (Bank) management earlier on during project execution. The lack of participation by affected people and local authorities in the project-related activities and a tendency by Bank supervision missions to ignore or take lightly the concerns of area people may be at the root of these problems."

After the Inspection Panel review was completed, acting World Bank Vice President Isabel Guerrero sent a letter to one of the claimants that appeared as a paid advertisement in a Paraguayan newspaper stating, "the Bank is satisfied with the conclusions of the report which affirm that its policies on resettlements, environment, community participation, and others were fully respected and applied in the case of Yacyreta." This blatant lie was denounced by non-governmental organizations and later highlighted in a May 4, 1998 Financial Times article.


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