July 24, 2000
Probe International argues for better alternatives to Canadian-backed Challilo dam in Belize.
Fortis-Belize monopoly rules out better options
The jaguar and Scarlet Macaw are just two of the wildlife species threatened by a Canadian-backed hydro scheme that would flood one of Central America’s last undisturbed wildlife habitats.
Fortis Inc. – a billion-dollar Canadian corporation that owns electric utilities in Newfoundland, Ontario, and Prince Edward Island – and the Belizean government are partners in Belize Electricity Limited (BEL) – the utility that plans to build a hydro dam and reservoir that would flood a critical stretch of the Macal river in central Belize.
Agra Canadian International Power, an Oakville-based firm hired by BEL to study hydro potential along the Macal river, has recommended the Chalillo dam as “technically and economically viable.”
Conservation groups are opposed to the scheme because it would flood a remote river valley in the Central Maya mountains that is home to rare and endangered species, including the Central American river otter, Morelet’s crocodile, the Central American spider monkey, Belize’s national animal, the tapir, jaguar, and Scarlet Macaw.
“Trading off millions of years of biological evolution for a hydro scheme which, at best, would last 50 years, is an environmental crime of the highest degree,” says award-winning conservationist Sharon Matola, Director of the Belize Zoo and Tropical Education Center.
Other critics, including Probe International, also argue that the $28 million Chalillo dam is uneconomic and that Belize’s electricity monopoly (BEL) is denying consumers access to better and cheaper generating options.
Probe International rejects Agra’s claim that Chalillo could supply about 70 percent of the country’s annual electricity needs by 2003 given that an existing hydro facility further downstream is crippled by water shortages for five months every year. If Chalillo is built, BEL would still have to pay for alternative power supplies during the months that the dam can’t produce.
Traditional dam financiers now recognize that large hydro dams are notoriously unreliable and costly power providers, especially in the tropics.
The Inter-American Development Bank, which has invested almost US$9 billion in hydro dams since the 1960s, stopped financing them in 1995, saying that natural gas is now the fuel of choice for Latin America’s new power producers.
The World Bank, once a leading dam financier, helped finance Belize’s grid connection with Mexico in 1997, so that BEL could take advantage of cheap power from Mexico’s competitive gas-fired producers.
“The only reason the Chalillo dam appears viable,” says Gráinne Ryder, Probe International’s Policy Director, “is because BEL has the monopoly power to offer guaranteed revenues to investors and to pass along its uncompetitive costs to captive ratepayers.”
If Belize consumers had any choice, she says, they would likely demand cheaper, cleaner generating options that don’t threaten the country’s wildlife.
Electricity imports from Mexico and high-efficiency gas turbines are both cheaper than Chalillo, according to BEL’s own figures.
For Belize’s sugar and citrus growers, cogeneration plants run on waste by-products are another attractive option. Belize Sugar Industries, for example, could generate twice as much power as Chalillo from its own waste.
BEL rules out cogeneration as more costly than Chalillo but the real obstacle is BEL’s monopoly which doesn’t allow power consumers to produce their own power and negotiate electricity sales directly with other customers.
CONTACT: GRAINNE RYDER, Policy Director, Probe International, (416) 964 9223 ext. 228 or email GrainneRyder@nextcity.com
Probe International is a Toronto-based citizens’ group investigating the economic and environmental effects of Canadian aid and companies in developing countries.
Categories: By Probe International, Export Credit
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