Hydropower is often considered a climate-friendly solution to energy needs. Brazil has elected to construct a major hydroelectric project in the Amazon region: Complexo Madeira. A case study of Complexo Madeira illuminates the Brazilian licensing process for this project and reveals the challenges and benefits of such a process, including the resulting policy changes and political rifts. Brazil’s licensing process is relatively demanding, and the environmental impact studies for Brazilian projects are lengthy. The Complexo Madeira environmental impact studies considered only nuclear and thermoelectric alternatives to this major hydropower project, and failed to consider energy efficiency or distributed generation as legitimate alternatives—a critical oversight that should be avoided in future hydropower project licensing.