Spotlight: A Honduran hydro developer’s innovative community approach

Empowering and putting the community first has been the key to advance run-of-the-river hydroelectric projects for Honduran company IESA, chief executive Emin Abufele told BNamericas.

IESA unit Semsa operates the 8.8MW Mezapa plant (pictured) in Atlántida department, where sister unit Ingelsa is developing the US$75.6mn, 14.8MW Jilamito project.

“Before starting the construction of the project, we first start the social part, and not what is typically done in a socialization where one talks with residents about how the project is going to be done,” said Abufele. “We go much further than that, we first begin the physical social works and then we begin the construction of the project.”

The executive highlighted that for Mezapa, roads and a 40t-capacity, 50m-long bridge were built, along with schools as well as promoting the establishment of businesses.

Source: IESA

“Although it's cheaper for us to purchase steel rods, sand and gravel in the large cities, by buying from the local community you generate local wealth and promote sustainable economic development,” he added.

Abufele also said the company never built workcamps or dining halls but offered the local community the possibility of building homes and eateries to support the project.

He explained that IESA financed the construction of homes, and that residents covered the financing through the rent they charged the company. The homes then became the property of the residents.

The same model was used for the eateries, which are still used by company workers and the local community.

Another component of the group’s corporate social responsibility ethos is training local residents to operate the plant and help maintain infrastructure which requires upkeep due to the mountainous terrain.

On this front, Abufele said that IESA helped finance the purchase of machinery which residents also may use to provide service in the community and the greater area which is an important agricultural zone.

“The economic benefit was not only during construction, but it was prior and continues to this day. That is why the community asked us to do the second project,” according to the CEO.

JILAMITO

IESA has engaged IDB and the US International Development Finance Corporation to finance Jilamito.

Abufele expects financing will close next quarter and that construction would begin in 2Q21 and take four years.

The plant will connect to the national grid via a 34.5/138Kv substation to be built by Ingelsa and sell electricity in the open market and to state power company Enee under a power purchase agreement.