The Baker dams will flood ranching and agricultural lands, displacing communities. The Baker river basin brings sustainable income to Patagonia's local communities through the rapidly growing tourism industry (much of it Chilean). This would be drastically reduced, as eco-tourists do not visit artificial lakes and power-line crossed vistas. Over half of Chile's residents oppose the project due to the environmental impacts. A coalition of at least 40 national and international groups is fighting the dams because of the significant threats to wildlife and local livelihoods.

The World Commission on Dams found that women and ethnic minorities were disproportionately affected by dam projects. As women are often responsible for ensuring the sustainable livelihoods of their families, impacts on these livelihoods through destruction of fisheries, flooding of agricultural land and forests, and displacement often result in women bearing a disproportionate share of the costs. It is women who are often left with the burden of caring for their families, finding alternative land and water sources and alternative livelihoods when these are taken away through the development of destructive dam projects.

There is evidence that women are not provided the training that the companies promise to local people in order to have the employment opportunities that the companies contend would come with this development. As well, there is anecdotal evidence that the company is not hiring women in order to avoid having to pay benefits to employees who later get pregnant.

The Baker River has the highest flow of all Chilean rivers. Its ecosystem supports a high degree of biodiversity, including documented populations of the endangered huemul deer. Chilean environmental authorities have characterized the river's entire basin as a biological corridor and have said that the Baker River's conservation should be prioritized. The two dams on the Baker River would create artificial lakes flooding more than 4,300 hectares (10,700 acres). Flooded lands would include some of the best agricultural and ranching lands of the region.

The Pascua River has the third highest flow of all Chilean rivers, and is extremely remote. Especially in its upper reaches, the Pascua river ecosystem includes some of Chile's largest remaining populations of the endangered huemul deer. Chilean environmental authorities have recognized the Pascua for high aquatic biodiversity, have characterized most of the river's basin as a biological corridor and have said that this river's conservation should be prioritized. The three dams on the Pascua River would create artificial lakes flooding more than 1,600 hectares (4,000 acres). Flooded lands would include some of the world's rarest forest types, including the critically endangered guaiteca cipres. Other rare species that would be harmed by the Pascua dams include the huillin river otter and the torrent duck.

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The construction activities would bring over 5000 workers into a sparsely populated and ecologically sensitive area, increasing pressure on existing resources and threatening the way of life of the traditional populations of Aysen. New roads would be built and existing ones expanded, opening access to fragile-and previously undisturbed-ecosystems.

The 2450-km transmission line for the project would cut through half of Chile. Thousands of acres of old growth forest would be felled, and the line would cut a 120-meter wide corridor through people's homes and land and numerous protected areas. The risks of the transmission line failing due to an earthquake, volcanic eruption or other natural disaster are high. It could take months to repair the line, particularly if a volcanic eruption necessitates a change in route. Given that around a fifth of Chile's central grid would depend on power from HidroAysen, this could lead to blackouts and power shortages on a grand scale, threatening the stability of the entire grid.