Chalillo Dam

Dam under fire

Jill Replogle
Latin American Press
March 1, 2002

Law suit could be one of the most important political moves in Belize’s environmental history.

Opponents still hope they can stop a controversial hydroelectric project on the Macal River.

Belize’s Macal River has become a battlefield in the war pitting energy production against conservation.

Approval in November of the Macal River Upstream Storage Facility, known as the Chalillo dam, by the National Environmental Appraisal Committee (NEAC) seemed to give the green light to Canadian-based Fortis Inc. to start building. But a court challenge by Belizean environmental organizations may stall the process.

The proposed dam and reservoir site is 12 kilometers downstream from the confluence of the Macal and Raspaculo rivers in the Cayo district of western Belize. While virtually unpopulated, the area is rich in biological diversity and home to several rare and endangered species, including the Baird’s tapir, Morelet’s crocodile and Central American scarlet macaw.

In its Wildlife Impact Assessment Report, the British Natural History Museum called the Macal and Raspaculo watershed “one of the most biologically diverse regions remaining in Central America.”

The report added that the watershed is home to “many endangered vertebrate species of international value” and contains a rare floodplain habitat that “does not occur elsewhere in Belize (and) will suffer approximately 80-percent permanent inundation if the project proceeds as planned.”

Several Maya archeological sites would also be flooded.

Although the government, NEAC and project promoters acknowledge the dam’s predicted cultural and environmental impact, they say the benefits of cheaper electricity and decreased dependence on Mexican energy outweigh the costs.

Belizeans pay US$0.19 per kilowatt hour, more than twice the average price in other Central American countries. Belize buys about 50 percent of its energy from Mexico’s Federal Electricity Commission under a contract that expires in 2008. Another 38 percent is provided by the Mollejon hydroelectric station, downstream from Chalillo, while 12 percent comes from diesel generators.

The dam is to be built and managed by Belize Electricity Co. Ltd. (BECOL) and financed by Fortis, which owns 95 percent of BECOL. Fortis also owns 67 percent of Belize Electricity Ltd. (BEL), Belize’s sole elec­tricity provider. BEL has a contract with BECOL to buy all electricity generated by Chalillo for 50 years.

According to the Environment Department’s project summary, Chalillo is designed to provide 7.3 megawatts of power and increase water supply for the downstream Mollejon station, increasing its output by about 70 percent. The Mollejon dam, also owned by Fortis, has been significantly underproducing since it began operating in 1995. Some opponents of the Chalillo dam have criticized BEL and the government for planning an additional dam to bail out the failed Mollejon dam.

Part of the $60-million cost would be passed on to electricity consumers in the form of increased rates.

The environmental impact assessment reviewed by NEAC is the third commissioned by BEL for a dam in the area since 1992. The final feasibility study, released in December 1999, concluded that the project would have a net present value of $3.2 million. But the Conservation Strategy Fund (CSF), which was hired in 2000 by the Belize Alliance of Conservation Groups (BACONGO) to analyze the feasibility study, estimated the mean net present value at a negative $4.5 million in 1999 terms.

The $7.7-million difference in the estimates is an indication of the project’s economic uncertainty, which both supporters and opponents of the dam have used in their arguments.

BACONGO consultants say there are less-expensive energy options, including maximizing purchases at the Mollejon plant, restructuring use of diesel generators and Mexican power, and teaming up with Belize Sugar Industries to produce energy by burning sugarcane waste. That process already provides some electricity to the country’s grid.

The government has emphasized the instability of purchasing electricity from Mexico, where cost depends on world oil prices and service has been inconsistent.

“We cannot continue to depend on Mexican supplies,” said Moisés Cal, Belize’s ambassador to Guatemala. “Prices of Belize’s traditional exports are decreasing, demand for oil is high and world prices are unpredictable.”

Cal said that without reliable, cheap energy, it is difficult to attract foreign investment and stimulate development. Electricity sales in the country are expected to double by 2012.

Dam opponents, however, say Chalillo’s environmental costs would cancel out any gain.

“In comparison to what we have to give up in wildlife and even economically, this project just doesn’t make sense,” said Mic Fleming, owner of the Chan Creek Eco Resort, downstream from the proposed site.

The proposed dam has caught the attention of international environmental activists, including Robert Kennedy Jr., son of former US Attorney General Robert Kennedy and a lawyer for the US-based Natural Resources Defense Council. The International Coalition to Save the Macal River Valley staged protests in Canada in December.

After NEAC approved the project, nearly 400 dam opponents gathered in Belmopan, Belize’s capital, to protest the project.

Not all national environmental groups oppose the project, however. The Belize Audubon Society, while originally critical, gave its approval after participating in the NEAC assessment.

While the government has stressed the need for increased independence from foreign energy providers, critics question whether BEL’s 50-year contract to supply energy to Belize merely trades one form of dependence for another.

The Chalillo dam’s fate is not yet sealed. BACONGO claims that Fortis has broken Belizean environmental laws by beginning construction without final approval or government permits. In addition, mitigation measures required by NEAC have not been finalized.

Fleming still hopes that the upper Macal River valley will remain in its natural state.

“If this gets blocked, it could be one of the most important political moves in Belize’s history whereby the people stopped something they were completely against,” he said.

Categories: Chalillo Dam, Odious Debts

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