Dutch bank halts funding for Honduran hydro project following murders

Funding for the Agua Zarca dam has been suspended by the Netherlands Development Finance Company (FMO), following the murder of two local activists.

Nelson García, an environmentalist with the Council of Indigenous and Popular Organisations of Honduras (COPINH), was shot dead in March, just two weeks after the fatal shooting of the group’s founder, Berta Cáceres.

Ms Caceres was a member of the local Lenca people, and the leader of a campaign against the Agua Zarca scheme – a dam being constructed on the Gualcarque river, on land claimed by the Lenca.

The three-year COPINH campaign had included blocking roads to prevent the delivery of supplies, reportedly in the face of serious intimidation and threats.

The Agua Zarca dam is one of four being developed on the Gualcarque river basin by the private company, Desarrollos Energeticos (DESA).

Now, along with FMO’s suspension of funding, another backer, Finnish Fund for Industrial Cooperation (FinnFund) has halted its involvement with the scheme.

Two more groups, the International Finance Corporation of the World Bank Group and China’s Sinohydro, had previously withdrawn from the 22 MW hydro project.

In the face of a growing international outcry regarding alleged human rights issues and illegal activity, only the Central American Bank for Economic Integration (CABEI), which has co-financed a loan of around US$ 24 million, continues to fund the Agua Zarca project.