Part of the financing for the US$75.6 million, 14.8-MW Jilamito run-of-river hydro project in Honduras has fallen through.
“After an extended due diligence period, [the US International Development Finance Corporation] DFC has concluded that the agency can no longer pursue financing of the Jilamito hydro project,” a DFC spokesperson told BNamericas.
The government lender provided the statement in response to a request for comment regarding a report from Honduran social and political NGO Movimiento Amplio that DFC had canceled US$35.7 million in financing for the planned hydroelectric plant.
The NGO has pointed to alleged socioenvironmental shortfalls of the Jilamito Multipurpose Water, Biodiversity and Renewable Energy Project. Jilamito, on the Jilamito River, will provide drinking water to 12 communities on the Honduran Atlantic coast, in addition to providing renewable electricity to the national grid. The facility also will support the management of the Texiguat Wildlife Refuge.
DFC said that it “remains committed to supporting the economic prosperity of the Honduran people. We will continue to seek financing opportunities that address the root causes of migration from the Northern Triangle region including investing in clean water, affordable housing, and lending to entrepreneurs and local small businesses.”
For its part, Honduran company IESA, whose Ingelsa unit is developing Jilamito, told BNamericas that “IESA is currently working across its stakeholder networks to create new developments for the project.”
Construction of the plant in Atlántida department was to begin this quarter and take four years. It is anticipated to produce 85.8 GWh of electricity annually.
In December, IDB Invest greenlighted a US$20.25 million loan to support Jilamito. IDB Invest information shows the financing status as “approved” and that the project had received the environmental license.
In its environmental and social review summary released in 2019, IDB Invest said it met with landowners, local officials and other stakeholders including NGOs, among them Movimiento Amplio. The summary highlights Ingelsa’s experience in managing environmental and social aspects but also points out that the project’s development “is taking place during a period of increased national social pressure and resistance to hydropower development.”