Electrifying Guatemala: Clean Energy and Development

On April 20, 2007, the communities of Ixcán, the northern region of Guatemala's department of El Quiché, voted overwhelmingly to reject the construction of a hydroelectric dam known as Xalalá. The result was hardly a surprise, given that at least 17 Ixcán communities, will be inundated because of the dam, according to El Observador, a bimonthly journal based in Guatemala City. Although the results of the consultation were sent to the Guatemalan government, it has yet to respond. But, the protests had an impact. In 2008, financiers withdrew support for the project and the national government is still working to renegotiate funding.

Susan Fitzpatrick-Behrens

On April 20, 2007, the communities of Ixcán, the northern region of Guatemala's department of El Quiché, voted overwhelmingly to reject the construction of a hydroelectric dam known as Xalalá. 21,155 people from 144 Ixcán communities participated in the vote, organized by local activists as a nonbinding popular consultation, and almost 19,000 of them voted to oppose the dam. The result was hardly a surprise, given that at least 17 Ixcán communities, will be inundated because of the dam, according to El Observador, a bimonthly journal based in Guatemala City.

Although the results of the consultation were sent to the Guatemalan government, it has yet to respond. But, the protests had an impact. In 2008, financiers withdrew support for the project and the national government is still working to renegotiate funding. If constructed, the dam will generate 181 megawatts of energy, making it the country's second-largest electricity-producing dam.

Xalalá is one of 37 hydroelectric projects slated for development in Guatemala.
Hydroelectric dams in Guatemala are presented as a means of promoting "clean energy," but they are also central to the export-led-development programs promoted by the free trade agreements of Plan Puebla Panama/CAFTA/Plan Mesoamerica. These agreements promote the expansion of mining, petroleum exploration, maquiladoras, and sugar and African palm cultivation for export. The plans also include the construction of the Franja Transversal del Norte, a highway that will run from Mexico to Colombia, traversing the same region where mining, petroleum, and hydroelectric dams are concentrated in Guatemala. The massive hydroelectric dams, a pet project of the World Bank, are meant to supply electricity primarily to the expanding energy-hungry industries, while the highway will facilitate export.

In 2008 foreign direct investment in Guatemala increased by 56%, with most funds directed toward hydroelectric dams, mining, petroleum exploration, and the development of African palm. The same foreign companies that dominate the building of the hydroelectric dams-Jaguar Energy, Duke Energy, ESI, Unión Fenosa, Endesa, Grupo Terra and Solel Boneh International-are often also involved in developing the industries that the dams are meant to power. Solel Boneh International, for example, which is the main contractor for building the Franja Transversal del Norte, also holds contracts to construct a hydroelectric dam in the Ixcán. The family affiliated with Grupo Terra also has ties to the textile industry and to the petroleum industry. And Duke Energy holds a contract to supply energy from its hydroelectric dams to the Guatemala Nickel Corporation (CGN) in El Estor.

Statistics on investments in maquiladoras are less readily available, but the manufacturing sector is a central part of PPP/CAFTA/Plan Mesoamerica. Supplying them with enough electricity is a key potential obstacle to further developing them, given the relatively high cost of electricity in Guatemala. Guatemala's El Observador reported that a study by the Commission of Clothing and Textiles (VESTEX) concluded that manufacturers in Guatemala pay 19 cents per kilowatt hour, while in other countries the cost is between 10 and 12 cents, so that electricity represents 40% of their manufacturing costs. President Álvaro Colom has pledged to resolve this problem by providing some $1.8 billion to develop hydroelectric projects, thereby reducing the country's dependence on petroleum and not incidentally reducing the cost of electricity for manufacturing and mining.

Ironically, most of the more than 700,000 Guatemalans who lack electricity live precisely in the departments where the dams will be concentrated-El Quiché, Alta and Baja Verapáz, El Petén, Huehuetenango, and Izabál, the country's poorest departments. Yet little has been said about connecting poor Guatemalans to the grid. An exception is César Fernández, director of the National Commission on Electric Energy, who candidly told El Periódico, "The costs to deliver electricity to these isolated rural areas of the country are high and not at all attractive for the market."

Critics have noted that the World Bank's projects disregard the social and environmental costs of large-scale hydroelectric dams, including the devastation of natural environments, the mass displacement of people, and the creation of large-scale public debt. Moreover, they suggest that hydroelectric dams are less about "clean energy" and more about "cheap energy" to be consumed, in this case, by the dirtiest of industries, including mining and oil extraction concessions, as well as manufacturing.

Guatemalans are not alone in facing these problems. The governments of Argentina, Brazil, Chile, Ecuador, El Salvador, Honduras, Mexico, Nicaragua, Panama, Peru, and Uruguay are all promoting hydroelectric dams. They are doing this with the encouragement of the World Bank, whose funding for massive hydroelectric dams has increased from $23 million in 2003 to more than $1 billion in 2008. The bank claims that these dam projects, focused in Latin America, Asia, and Africa, will provide much needed electricity while reducing dependence on fossil fuels and lowering carbon emissions.

Meanwhile, most of the countries that are attempting to build new dams are confronting overwhelming opposition, especially among the indigenous and African-descendent peoples who will be affected most directly. Despite the requirement that indigenous communities be consulted on land use issues, as stipulated under the International Labor Organization's Article 169, governments rarely do so.

Furthermore, the Guatemalan government's development scheme confronts a tragic legacy. The new dams, together with the mining and manufacturing that they will serve, are being constructed in the very regions most heavily devastated by violence during the country's armed conflict. Among the worst massacres of the conflict—and the case cited most often by Ixcán community members who oppose the Xalalá dam—was, in fact, linked directly to the construction of a hydroelectric dam. In 1982, the military and civil patrols massacred some 250 people in Río Negro, where residents had strongly resisted being resettled to make way for the inundation resulting from a hydroelectric dam to be built on the Río Chixoy.

Then as now, hydroelectric dam construction was part of a larger national development project financed by international lenders and connected to mining. In 1976, then Guatemalan president General Kjell Laugerud and Ortiz Mena, secretary-general of the Inter-American Development Bank, signed a loan agreement for $105 million to build what would become the Río Chixoy dam. The World Bank provided an additional loan of $72 million in 1978.

The dam in Río Negro was one component of the National Institute of Electricity's (INDE) master plan developed in 1976 and inextricably linked to the discovery in the 1960s of Guatemala's mining potential. A UN study had found mining potential concentrated in the departments of Alta and Baja Verapaz, Quiché, and Huehuetenango, as well as "hydrocarbons in commercial quantities and quality in the departments of the Petén, part of the Quiche, Alta Verapaz, Baja Verapaz, and Izabal." These departments suffered the most devastating effects of military repression during the country's armed conflict. At the time, 32 foreign companies had already solicited licenses for oil exploration. Providing electricity was crucial to the plan.

Today, the Maya and Ladino campesinos who were displaced by violence are being displaced by "development." Indigenous communities in these regions have organized and voiced their protests consistently and vocally through petitions, mass marches, road blockades, and other public appeals. But they are often ignored, and in some cases leaders are getting killed. If this is "clean" energy, what would count as dirty?

Susan Fitzpatrick-Behrens is a NACLA Research Associate.

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