Skip to main content

Funders Officially Leave Controversial Agua Zarca Hydropower Project -- A Victory for Berta Caceres Allies

FMO and Finnfund, two financial institutions recently reached an agreement with Agua Zarca hydropower project developer DESA Corp to end their relations.
  • Author:
  • Updated:

On July 6, two of the major funders of a controversial energy project in Honduras announced the formal end to their participation in the project opposed by slain Lenca leader Berta Caceres and others.

Indigenous allies of Caceres saw the announcement “as a victory for the communities” but are still not satisfied with the funders’ positions regarding the oppression and violence facing the indigenous people and others.

“Two of the lenders of the Agua Zarca hydropower project in Honduras, FMO (Netherlands Development Finance Institution), Finnfund (Finnish Fund for Industrial Cooperation), together with owner and developer DESA, mutually agreed to end their existing contractual relations,” according to a joint press release issued by FMO and Finnfund.


“The lenders have supported this project believing that it would bring positive development impacts for the country and local communities,” the funders stated.

“The lenders’ exit from the project is intended to reduce international and local tensions in the area. The lenders wish that all external stakeholders allow for local communities to initiate a dialogue among themselves to decide on the future of the area, the development options they have at hand, and if a hydroelectric project should be one of them or not.”

The funders’ also stated that they believed a dialogue should be convened, with the oversight of a “credible international institution” that would allow for the participation of “all the communities.” They also called for participation from a “credible international human rights institution that can monitor the situation on the ground before any dialogue is initiated.”

At different times during the conflicts between the Lenca community and project officials, Amnesty International, the Inter-American Commission on Human Rights, and Global Witness among others sent observers to Honduras; they all provided testimony regarding charges of human rights abuses committed by authorities and others against the Lenca.

Scroll to Continue

Read More

When asked which international human rights institution would be considered credible by the funders, a spokesman stated that it wasn’t the role of the funders to decide that point.

“Indeed, there have been discussions with international organizations, but for the independence of the process, it’s not our role to provide further comments about it. This dialogue should only happen if the communities want it and, as said before, FMO and Finnfund will not be involved,” said Jaakko Kangasniemi of Finnfund.

The funders also made it clear that they were leaving the project with a positive attitude towards DESA, the corporation in charge of the project.

“The lenders note that no proven connection has been established between DESA and allegations regarding any illegality. They also appreciate DESA’s willingness to put the project on hold to allow for such a dialogue to happen…,” according to the group statement.

However, the press statement from the National Council of Indigenous and Popular Organizations (COPINH), which had been led by Caceres, asserted that the community was still not satisfied with the funders’ response.

“…we denounce that the FMO and Finnfund have ignored COPINH's recommendations about a responsible exit. To the contrary, the banks continue promoting a decision-making process about a hydroelectric dam project that could generate more violence and repression.”

“This process contemplates impunity for the murders and crimes committed and the tries to make invisible the responsibility of DESA and the state of Honduras for the violence in the region,” according to COPINH.

“In the same way, in their public declaration, FMO and Finnfund do not consider their responsibility for the death and human rights violations that have resulted from the project. We continue demanding that the banks recognize their responsibility and that they apologize to the affected communities and COPINH, which they have refused to do,” stated COPINH.