The U.S. government withdrew financial support this week from a proposed dam in Honduras that is at the center of a simmering conflict between local residents and developers. Two opponents of the project have been killed.
The decision by the U.S. International Development Finance Corporation, (DFC), which provides funding for private-sector projects, marked a victory for the activist groups in Honduras and the United States that had urged the agency to drop the project. In a recent letter to U.S. officials, they drew parallels to the 2016 murder of Berta Cáceres, a prominent activist who led opposition to a similar dam project in Honduras.
The DFC, which had pledged loans of $35.7 million towards the Jilamito Hydroelectric Project, a 14.8 MW dam in northeastern Honduras, gave no reason for its decision, except to note that it was taken after “an extended due diligence period.”
But the reversal of the approval given by the Trump Administration comes as the Biden Administration is reviewing policies towards Honduras, Guatemala and El Salvador to try and reduce the poverty, corruption and violence that drive tens of thousands of people to try and reach the United States every month.
A 2009 coup in Honduras sent the country -- already one of the hemisphere’s poorest -- into a spiral of violence. Since then, the country’s political class has been involved in repeated scandals, including drug trafficking convictions in the United States for close relatives of the two presidents elected since the coup.
The Biden Administration's about-face eliminated almost half the funding for the $75.6 million-dollar dam project. A division of the Inter-American Development Bank (IDB), a multilateral financial institution, has pledged another 27 percent of the dam’s cost in loans. The division, IDB Invest, had no comment on the DFC’s withdrawal.
The remaining investment comes from a Honduran company, Ingelsa, which initiated the project some 15 years ago. In the past few years, opposition has grown as the local community was joined by a national group, the Broad Movement for Dignity and Justice, known by its Spanish initials as MADJ.
Activists from MADJ joined with U.S.-based organizations, such as School of the Americas Watch and the Latin America Working Group, to pressure the DFC to withdraw its funding for the Jilamito dam. Democratic legislators, led by Rep. Ilhan Omar, have also asked the agency to drop the project.
“We have had positive conversations on this topic since President Biden took office and I am proud they revoked support for the project,” Omar said.
Ingelsa, however, said that its plans will proceed. The company said this week that it “was building the Jilamito project” and pointed to what it said was a record of “making positive changes in rural communities.”
The initial backing from the DFC and the IDB, announced last year, brushed off evidence of local resistance and the pervasive threats of violence that environmentalists face in Honduras. Global Witness, an international NGO that tracks threats to activists around the world, has called Honduras one of the most dangerous countries in the world for land defenders.
The killing of Cáceres, who had won the Goldman Prize, an international award for grassroots activists, showed that even global recognition was not enough to protect land defenders in Honduras. The president of the company behind the dam project she fought is on trial on charges of planning her murder.
At least one activist directly fighting the Jilamito dam has been killed. In 2018, Carlos Hernández, a lawyer representing a local official opposed to the dam, was killed by unknown attackers at his office. As with the vast majority of homicides in Honduras, his case remains unsolved.
Hernández was a former prosecutor hired to defend Arnoldo Chacón, mayor of the municipality called Arizona, through which the Jilamito River flows, in the department of Atlantida. Chacón had been charged alongside four MADJ members for crimes involving an encampment protesting the dam project. All five await trial.
A few months before Hernández was murdered in the spring of 2018, two MADJ organizers were killed, allegedly by Honduran security forces. Ramón Fiallos, who was also from Arizona, was shot in the arm by police and bled to death during a January protest against the contested re-election of Honduran President Juan Orlando Hernández. Activists suspect that Fiallos was targeted for his opposition to the Jilamito dam and other projects during the wave of unrest following the election.
Another member of MADJ was killed by police hours after Fiallos was shot. Geovanny Díaz was dragged out of his home in Pajuiles, forty miles to the west of Arizona, and shot execution-style by men dressed in police uniforms, according to eyewitness reports. Díaz opposed the damming of another river near his town.
Global Witness named all three in its 2018 report on environmental defenders who had been killed for their activism.
Ingelsa said that it had never committed any act of violence and that the company was working through dialogue to confront what it called false accusations. The community had given the project broad support, the company said in a statement to VICE World News.
Supporters of the dam say that it would boost Honduras's renewable energy sources, improve electricity service in cities on the country’s northern coast, and bring hundreds of jobs to the region during the construction phase. To address concerns about water supply, Ingelsa developed a strategy to assure drinking water to the area.
But MADJ co-founder Martín Fernández said that the proposed dam would deprive as many as 30,000 people of drinking water and pointed to similar dam projects that he said privatized access to water. He accused Ingelsa of criminalizing opposition to the dam and added that residents of Arizona had twice agreed in formal community assemblies to revoke the concession of their river.
MADJ said that other hydroelectric projects in the region had not improved access to power for local communities and that instead, electricity prices had risen.
Aside from the violence surrounding the project, DFC may have been concerned about one of Ingelsa’s main shareholders. Ingelsa is owned by a manufacturing company called Hermacasa, controlled by a Honduran businessman, Emin Abufele Marcos.
Emin Abufele's father, Emin Abufele Salomon, a minority owner of Hermacasa, might have raised a red flag. In 2003, U.S. diplomats recommended that Abufele Salomon and Omar Abufele Salomon, another minority owner of Hermacasa, be denied entry into the United States because they allegedly “engaged in a pattern and practice of fraudulent financial practices” involving a Honduran bank.
A Massachusetts tool manufacturer, Simonds International, owns almost 40 percent of Hermacasa. David J. Miles, the president of Simonds Saw, said in an email that the opposition to the dam was political and “without merit” and that it was involved in talks to “find the best path forward based on the current investment climate.”
With one success in its fight against the dam, the opposition will continue. “The people of Arizona do not want any more crumbs, nor lies, nor broken promises,” Juan Antonio Mejía Guerra, the research co-ordinator at MADJ, said in an email, referring to the proposed drinking water project.
“Arizona has decided that the water of the Jilamito River should be exclusively for human consumption.”
Correction: This story originally said the DFC had pledged loans of $35.7 billion towards the Jilamito Hydroelectric Project, when it was in fact loans of $35.7 million. We regret the error.