IDB withdraws financing for two HEP schemes in Guatemala

In June this year, El Economista reported on the withdrawal by the Inter-American Development Bank of funding for two Guatemalan hydroelectric projects (HEPs).

Translated and summarised by Martin Mowforth

Key words: Guatemala; Inter-American Development Bank IDB); hydroelectric projects (HEPs); Indigenous communities; consultation.


A number of Guatemalan non-governmental organisations (NGOs) expressed their pleasure that two HEP projects in the north-west of the country had lost their funding from the Inter-American Development Bank (IDB).

The two schemes are the San Mateo and San Andrés HEP projects and both are run by the same private company, Energía y Renovación S.A.. They are both located in the municipality of San Mateo Ixtatán and both were begun in 2013.

The IDB’s decision to withdraw funding followed a Bank internal report produced in September 2021 and based on an investigation of the way in which the two schemes were being installed in the department of Huehuetenango.

In a press conference in Guatemala City, Rosa Peña, a representative of the Inter-American Association for the Defence of the Environment (AIDA), stated that the decision by the IDB “is a recognition of the denunciations made by communities surrounding the projects.” Peña explained that AIDA and other Indigenous and environmental organisations had accompanied the communities and had officially submitted the denunciations to the IDB in 2018.

According to Peña, the IDB’s internal report and its recommendations “must prompt the IDB to learn lessons and must not repeat the same errors from the past.” The IDB’s funding of the projects amounted to 13 million US dollars and will be cancelled due to the internal report’s indication that the two projects violate the bank’s economic norms.

“What we are seeing in this case is that it is the same bank that is recognising that it has broken its own norms”, added Rigoberto Juárez – Juárez represents the Plurinational Ancestral Government of the Akateko, Chuj, Popti’ and Q’anjob’al Original Peoples – during the press conference.

The denunciations of the Indigenous communities neighbouring the HEP schemes began before the installations were producing due to the lack of a consultation of the people, and the abuse of natural resources continued, especially in the location of these two rivers, and the abuse was translated into violence against the local people, according to the local media.