Jul 10, 2017

FMO and Finnfund officially withdraw from Agua Zarca project


Two of the primary backers of the Agua Zarca hydropower dam project in Honduras have officially announced their exit from the project following years of campaigning by local indigenous groups and criticism from international civil society organizations.

In a press release issued on July 6, the Dutch development bank, FMO, which exited the project along with the Finnish development finance company, Finnfund, stated that their exit from the project “is intended to reduce international and local tensions in the area.” However, according to the rights groups Both ENDS and SOMO, the banks’ exit “fails to acknowledge the role they and their client [DESA] played in causing the conflict in the region.” Local communities have been fighting for years against the project and the risks it poses to their environment and human rights. Local leaders outspoken against the dam have been subjected to ongoing threats and violent attacks.

The Agua Zarca project gained international attention following the murder of Berta Cáceres on March 3, 2016. Cáceres, an environmental campaigner, was the co-founder and coordinator of the Council of Popular and Indigenous Organizations of Honduras (COPINH), which led the grassroots opposition to the project, citing concerns over environmental damage and lack of consultation and coordination with the local indigenous Lenca communities.

In a statement issued on July 6, COPINH welcomed the banks’ exit as “a victory for communities organized in defense of the sacred Gualcarque River and the rights of the Lenca people,” but pointed to the banks’ failure to enact a “responsible exit,” which leaves behind a “decision-making process about a hydroelectric dam project that could generate more violence and repression.” This includes the possibility of “impunity for the murders and crimes committed” in relation to the project, and the continued lack of accountability for DESA, the private company that serves as the project’s owner and developer.

Commenting on the banks’ failure to plan for a responsible exit, Anna van Ojik, a policy advisor with the Dutch group, Both ENDS, stated that “What happens now should first and foremost address the impunity for the human rights violations in the region. Violence and threats are greater than ever and still no justice has been done for the brutal murder of Berta Cáceres, the violent attacks in the community and the damages done to the communities’ property. The situation for the communities around the Agua Zarca project remains precarious as long as this is not addressed.”

The exit by FMO and Finnfund leaves the Central American Bank for Economic Integration (CABEI) as the project’s remaining primary funder.