Federal judge Ronaldo Desterro said environmental requirements to build the Belo Monte dam had not been met. He also barred the national development bank, BNDES, from funding the project.
The dam is a cornerstone of President Dilma Rousseff’s plans to upgrade Brazil’s energy infrastructure. But it has faced protests and challenges from environmentalists and local indigenous groups who say it will harm the world’s largest tropical rainforest and displace tens of thousands of people.
Judge Desterro said the Brazilian environmental agency, Ibama, had approved the project without ensuring that 29 environmental conditions had been met. In particular, he said concerns that the dam would disrupt the flow of the Xingu river – one of the Amazon’s main tributaries – had not been met.
His ruling is the latest stage in a long legal battle over Belo Monte. Previous injunctions blocking construction have been overturned.
The government says the Belo Monte dam is crucial for development and will create jobs, as well as provide electricity to 23 million homes.
The 11,000-megawatt dam would be the biggest in the world after the Three Gorges in China and Itaipu, which is jointly run by Brazil and Paraguay.
It has long been a source of controversy, with bidding halted three times before the state-owned Companhia Hidro Elétrica do São Francisco was awarded the contract last year.
Celebrities such as the singer Sting and film director James Cameron have joined environmentalists in their campaign against the project.
They say the 6km dam will threaten the survival of a number of indigenous groups and could make some 50,000 people homeless, as 500 sq km of land would be flooded.