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Finnfund seeks to exit Agua Zarca

09/05/2016

Finnfund has already suspended its disbursements to the project and promised to react if a credible connection between the project company and the crime were to be established. While keeping in mind that charges are not convictions, the time has come for the financiers to seek a responsible and legal exit from the project.

A court in Honduras decided on May 8 to press charges against four individuals in connection with the murder of Berta Cáceres, a well-respected human rights activist. The police and the judicial system of Honduras have performed their duties in the murder investigation. It is important to maintain the independence of the judicial system. Eventually we hope to see verdicts based on unequivocal evidence.

We are deeply concerned to learn that one of the individuals charged is an employee of DESA, the developer of the Agua Zarca hydro project we help to finance. Violence or limitations to people’s right to voice their views are never acceptable in connection with any project.

Finnfund has already suspended its disbursements to the project and promised to react if a credible connection between the project company and the crime were to be established. While keeping in mind that charges are not convictions, the time has come for the financiers to seek a responsible and legal exit from the project.

Finnfund lends to Agua Zarca with FMO, the Dutch development bank. We coordinate our reactions with FMO. The first reactions by us and other international financiers may already have an impact in how seriously the Government of Honduras has taken the murder investigation.

Agua Zarca is an investment prepared in accordance with international best practice for responsible investment. Despite having broad popular support in the affected communities, it also has opponents. Some of the people in the neighboring communities feel they have been excluded from the benefits of the project.

Finnfund has financed renewable energy projects in Honduras for more than ten years. Our other projects have been successful and they have not experienced the problems now seen in Agua Zarca.

The case of Agua Zarca underlines the need to pay attention to indigenous people and human rights. Finnfund seeks to finance projects that reduce marginalization and promote equality, also in Honduras.

Poor and conflict-ridden countries are always risky operating environments. Focusing on countries with no problems at all is not an option. Development is needed exactly where there is poverty, where human rights are not yet respected and where conflicts and the threat of violence are part of people’s daily life. In accordance with its mandate, Finnfund continues to operate also in difficult environments.

Jaakko Kangasniemi, CEO
jaakko.kangasniemi(at)finnfund.fi, tel. +358 40 577 7676

Tapio Wallenius, Director, Impact and Communications
tapio.wallenius(at)finnfund.fi, tel. +358 50 351 0753