The Guaigui dam project, located in La
Vega province in the Dominican Republic, has been in the works since 2001,
although its environmental impact study was presented in 2002 (Pro-Ambiente J&M
S.A.)and its environmental license was issued in 2003 (License
n. 0044-03). The project costs were initially estimated
at US $42.5 million. In 2003, NCC, the Norwegian firm building the dam, halted its
construction due to disagreements with the Dominican government over costs. The
company stepped out of the project altogether in 2005. Since then, new attempts
have been made to resume construction. In the end of 2005 a contract was
awarded to Italian-Dominican consortium Impregilo-Yarull. However, the
Dominican government failed to secure funding since it was unable to take out loans due to a limit set in place by the IMF on the
amount of debt that the government could take on. In June 2007, ABN AMRO ultimately decided to discontinue
the loan initially contracted in 2000 and further renegotiated in 2005-2006. In
October 2011 the Dominican government announced the project was soon to recommence
with funding from Deutsche Bank and the Dominican government at a total cost of
US$ 115.3 million.
>The project consists of a dam, a hydroelectric
power station, and electricity transmission lines. The dam is designed to be 70
meters high, 200 meters long, and will have the capacity to hold 50 million
cubic meters of water, although the 2003 license authorizes 800,000 cubic meters. The power plant would have an installed capacity of
2.0 MW and the reservoir would supply water to 600 hectares of agricultural lands (Sercitec 2010). Project objectives would include
providing the town of La Vega with potable water, and control flooding of the
Camu river. The government has additionally stated it plans to promote tourism
around the reservoir area, although the characteristics of the reservoir make that
option unviable. Because the main
objective of the dam is flood control, necessary changes in the water level
will result in creating aesthetically unappealing shorelines, thus reducing
tourist appeal (FIVAS, 2002).
The construction of the dam has met the opposition
of Dominican citizens and residents of the area. Opponents claim that the
primary motivation for the dam's development is to create business
opportunities around tourism and recreation for a few privileged local business
owners. This would explain why the government plans to expropriate approximately
22 km2 of lands while the reservoir is expected to occupy an area many times
smaller, around 2.8 km2. The communities' fears are confirmed by a study
commissioned by the Dominican government in 2010. The study affirms that: "Considering that the people in the area of
influence, especially those with properties adjacent to the future reservoir,
have shown their interest in participating in tourism activities that can be
developed, it is considered of importance to the project's socioenvironmental
management, clearly defined activities that could be performed on the banks of
the reservoir" (Sercitec 2010, p. 199).The construction of the dam will affect at least 500
families of small coffee farmers in three surrounding communities founded over
150 years ago. At least 129 of these families will be forcibly displaced and have no guarantee they will be adequately relocated. None
of the affected communities have been adequately consulted or informed on the
dam and its impacts, as the Dominican government decided they had "no capacity
to understand the technical details of the project". This statement (originally in Spanish: "En la parte técnica supongo que los afectados no
estarían en condición de asimilar aspecto técnico…”) was made by INDRHI
engineer Romer Polanco at a public hearing held on February 8, 2006.
Many opponents of the project assert that
the advantages proclaimed by the Dominican government are overstated and made
without any scientific basis or quantifiable calculations. The approved project
does not match its stated objectives, and no alternative project has ever been
considered. The risks would be increased by the geological characteristics of
the area since the project is located near the Bonao Fault.
The project is an initiative of the
Dominican government and is being overseen by the National Hydraulic Resources Institute,
INDRHI. Additional project stakeholders (past and present) include: Norwegian
construction firm NCC; Italian-Dominican consortium
Impregilo-Yarull; Norwegian consultants
Sweco Groner and Norplan; Norwegian Export Institute GIEK; the Copenhagen
branch of ABN AMRO; and Deutsche Bank.
2000: Government of the Dominican Republic signs a loan agreement with a value of US $42.5 million for the dam project
2002: Norwegian construction firm NCC starts construction of the Guaigui dam
2003: NCC halts construction because of disagreements it was having with the Dominican government over project costs. Between 2002 and 2003 the perforation of a 350 meter long diversion tunnel was completed
2005: April- NCC removes itself from the project
August- INDHRI places a call for new tenders to finish construction of the project
September- INDHRI awards construction contract to Italian-Dominican consortium Impregilo-Yarull. The contract value at this point is US $54 million. Sweco Groner is in charge of the final design, while Norplan would supervise the project. The combined value of the consultants' contracts is US $5 million. Construction on the dam did not commence, however, because the Dominican government was unable to take out loans due to a limit that was established by the IMF
October- President Leonel Fernández gives approval for resuming construction on the dam; current project costs: US $115 million
Construction of the Guaigüí dam will significantly
impact the lives of the people in the region. Due to land-use changes, the current
agricultural and recreational uses of the land will be affected. Peoples' dependency on agriculture and
livestock for their subsistence means that the dam's construction will threaten their ability to provide for their families.
The building of the dam will result in the displacement of
families. Peoples' traditional way of
living, their community structure, and social cohesion will be negatively
affected if they are forced to move elsewhere.
The majority of families in the Dominican Republic that have been forced
to relocate due to dam projects end up in city slums with no way to support
themselves. This is something that
families in the La Vega province fear, especially since their entire
livelihoods center around their ability to support themselves via agricultural
means. El Comité Defensa de Guaigüí
(Committee in Defense of Guaigüí) was established by villagers and the group's objective is to protect the rights of the
local people and to argue against the dam's creation. For more information please click here.
The construction of the Guaigui dam will have negative
environmental impacts on the surrounding environment. The most significant impact is the physical
change of the river's flow and the change in the water layer. Because of this, habitat loss will occur as
well as habitat changes in the reservoir basin.
Along with habitat effects, changes in the types of vegetation located
downstream of the dam are also expected to manifest. These impacts on habitat and flora will
certainly affect the fauna in the region, thus reducing their geographical
range or forcing them to relocate because of the unsuitability of the changed
In addition to the above, other changes are expected
to occur. First, the physico-chemical
properties of the water are expected to change.
Coupled with this, erosion processes will also be altered because of the
damming. Sedimentation is also a major problem in dammed rivers; it is something that occurs over time and can
cause significant issues in the future.
Because of the dam, sediment builds up and accumulates in the dam's lake
instead of being transported downstream and being deposited in a delta. Due to the alternation in the natural
sedimentation process, the sediment build up decreases the size of the lake and
shortens the lifespan of the dam.
Besides the above-mentioned changes that are expected during the
operational phase of the dam, there will be a multitude of environmental impacts
during the construction phase as well.
An increase in noise and air pollution can be expected as land is
cleared and physical construction of the dam commences. Changes in topography, soil contamination, and
water pollution are also likely (due to improper waste management). Overall, the ecological value of the area and the local ecosystem will be
undoubtedly affected by the dam's construction. For more information on the dam's potential impacts, please click here.
Per local citizens, construction
road work has begun and equipment is being transferred into the area. The Dominican government has been making
offers to buy land for RD$ 10,000.00 per "tarea". This offer is at a significant discount
considering that the market price is seven times that.
export credit guarantees: US $8.2 million (April 2010) The $78.2 million loan provided by Deutsche Bank included a tranche of $8.2 million to cover the costs of export credit guarantees provided by GIEK. source: B023.pdf
Additional information about earlier bank involvement:
ABN AMRO, although no longer involved in the project, did provide financing for the Guaigui project. Details are provided below.
First construction phase December 2000: The government of the Dominican Republic signed a loan agreement with the Copenhagen branch of ABN AMRO (the Netherlands) to finance the Guaigüí dam project. The loan had a value of US $42.5 million and came along with a guarantee from the Norwegian Export Institute (GIEK). US $23.0 million from the initial loan amount was spent until 2003, when construction was halted.
Second construction phase 2005-2006: Part of the loan provided by ABN AMRO which was not spent during the first construction phase was activated in 2005/2006, along with an increase of the loan with US$ 23.4 million. This brought the total amount to US $65.9 million.
2007: ABN AMRO decided not to continue with the loan
Overall, it is unknown as to which amount of the US $65.9 million loan was actually taken out before ABN AMRO stepped out of the project.