This page gives an overview of FMO’s involvement in the Agua Zarca project.
The Agua Zarca project was to be a small-scale run-of-the-river hydropower station on the Gualcarque river in northwest Honduras with a capacity of 21.3MW and a projected annual energy production of 98.8GW. The expectation was that it would have a significant positive impact on local living standards and employment. It would supply urgently needed electricity to a country where 45% of rural households have no electricity and more than half of all energy needs are met by imported fossil fuels. Its design meant it would have minimal impact on the environment. The developer and our customer was DESA, a local company incorporated in 2009 for the purpose of owning, constructing and operating this project.
The northwest of Honduras is one of the most marginalized regions of the country, itself one of the poorest and most violent countries in the world. Investing in such places is why FMO exists: to support entrepreneurs and make sustainable development possible in those places where it’s needed the most.
A few years before FMO’s investment, a new Honduran government emerged following a period of political turbulence. Foreign investments had started to increase a little and the government was looking to develop much-needed sustainable infrastructure projects. A project like Agua Zarca could help pioneer the country’s energy transition.