Agua Zarca

Agua Zarca

This page provides information on the Agua Zarca Project in Honduras.

The Agua Zarca Project is a proposed small-scale run-of-river hydro-electricity generation scheme of 21MW with an annual energy production of 99GWh.

The Honduran company DESA is the owner and developer of the project. FMO decided to co-finance the development of the project because it is designed to provide clean and sustainable energy in Honduras, a country that is largely dependent on fossil fuels. The project would generate jobs, clean energy (including jobs for the local communities) and would help to reduce poverty. In March 2016, Honduran environmental activist Berta Cáceres was murdered. Mrs. Caceres was a vocal activist against this project and led the Non-Governmental Organization COPINH. FMO publicly expressed the deepest sorrow at this violent death, and continues to call for a thorough investigation and for those responsible to be held to account. In addition, FMO temporarily suspended its activities in Honduras. In early May 2016, several people were arrested in Honduras as part of the investigation of the murder of Mrs. Cáceres, among them, a person associated with our client. A court case is pending and the outcome is still unknown.

On 9th May 2016, FMO announced that we would seek a responsible exit from the Agua Zarca project. At that time, we commissioned an independent fact finding mission to investigate a range of aspects related to the funding and construction of the Agua Zarca project.  The mission published their report in September 2016. FMO welcomed the conclusions and recommendations and will use these findings in the search for and development of our responsible exit.

FMO and the other Lenders engaged an independent facilitator in October 2016 to assist them with exploring options for a responsible exit which would take into account the interests of all parties. The independent facilitator made several visits to Honduras between October and January 2016.

FMO heard the views of directly affected communities around the project site through a number of channels including DESA, the independent facilitator and through personal meetings, both in Honduras and in the Netherlands.

FMO is currently in discussion with the other Lenders, the independent facilitator, DESA and other stakeholders in order to realize a responsible exit from the project.