As the Guatemalan government announces plans for turning its abundant rivers into a hydroelectric goldmine, the conflict in Rio Hondo is forcing authorities, investors and citizens to think twice about how hydro projects are developed.

Troubles started in Rio Hondo when the Pasabien dam began operating four years ago. Since then, downstream users say they have suffered poor water quality and scarcity.

"Before, [the water] was so clean and abundant, there was never any problem," said Eliazar Castañeda of Monte Grande, one of the communities downstream from Pasabien.

"Now everyone buys water from Pepsi," he said, referring to the nearby plant, where people with trucks fill up water containers to sell within the communities.

Rio Hondo II

Soured by this experience, locals have not taken well to plans for building another hydroelectric project, called Rio Hondo II, in the neighboring Colorado River watershed. They are especially wary about the fact that the same companies that own and operate the Pasabien project—US based Hydro West Group and its Guatemalan partner, Pasabién S.A.—are also behind Rio Hondo II.

As planned, the Rio Hondo II project would be relatively small, generating 32 megawatts of energy from water stored in a 34-foot-high dam, with a capacity of 1.2 million cubic meters (12.9 million cubic feet).

However small, the project would generate 10 times the amount of power as a previous dam that existed on the river, Rio Hondo I. Hurricane Mitch destroyed this project in 1998.

Mauricio Vásquez Mirín, representative of the local association that opposes the dam, said the potential environmental, social and economic costs of the hydro project are higher than he and others in downstream communities want to risk.

"In Rio Hondo it rains around 400 millimeters per year. This is very little rain. So the only thing that provides us with water is this watershed," said Vásquez Mirín.

He and other locals, as well as some environmental groups at the national level, assert that the dam will negatively affect the protected, core zone of the Sierra de las Minas Biosphere. They say the dam will flood a part of the core zone, and that plans to rehabilitate a road within the core zone during dam construction will negatively affect wildlife and vegetation.

Hydro West representative, Eduardo Barrientos Mejía, said these concerns, as well as those about decreasing water and water quality, are false. He also said people exaggerate the problems with Pasabien, and that the few real problems have been caused by low rainfall and mismanagement of water by local authorities and citizens.

"I don’t like to talk about the neighbor, but the people have been using water irrationally for 100 years. They divert the water, flood their lands, and then the water’s gone," said Barrientos Mejía.

"There’s confusion here, because the real person responsible for the water there is the mayor," added Barrientos. He said the company has fulfilled its commitment to keep the primary water tanks full and chlorinated, but from there on, the situation is out of their hands.

Some win and some lose

The conflict surrounding hydroelectric projects in Rio Hondo brings up fundamental questions about who benefits, who loses and who makes the decisions about this type of project.

On the up side, the project would bring local benefits in the form of jobs, income from building permits and funds for development promised by the hydro companies.

Óscar Núñez, director of the conservation organization, Defenders of Nature, which manages the biosphere above Rio Hondo, says low-impact hydroelectric projects, like Rio Hondo II, will ensure water and power for local industry, which employs much of the population of Rio Hondo and other nearby municipalities.

He also said hydroelectric dams and other industrial water users could provide funds for protecting water sources where the government has not.

"After 13, 14 years, we haven’t received a single cent directly from the state of Guatemala for administering the area," said Núñez. "To the extent that we obtain more investment in the Sierra de las Minas core zone from all water users, we are achieving long term sustainability for the environment and for human development."

At the same time, the national government is promoting Guatemala’s high, untapped hydroelectric potential as an economic asset and investment attraction. Hydroelectricity is also seen as the key to relieving the country from dependence on non-renewable energy.

Nevertheless, the Rio Hondo experience is showing that conflicts can arise when local communities and authorities are not involved in development decisions.

Barrientos reacted to public opposition to the project by saying "we’ll just have to convince them." He also referred to the building permit, which must be granted by the municipal authorities according to Guatemalan law, as a "formality."

Such attitudes have caused resentment in Rio Hondo and criticism from environmentalists, newspaper columnists and others at the national level.

"For me, not working more in the social and economic area of the communities has been an important error of the hydroelectric companies or the investors," said Núñez.

While the government says public participation and information-sharing will play an important role in the development of new hydro projects, the reality is yet to be seen.