San José, Costa Rica, since 1956

Officials Review Boruca Hydroelectric Proposall

After several decades of proposals, studies, inactivity and changes, the Boruca Hydroelectric Project appears closer than ever to becoming a reality – though not everybody likes the idea. Despite a relocation of the controversial dam, intended to lessen its impact, environmental and indigenous groups maintain their resistance to the project, which they say will do more damage than good.

The Boruca project looks to capitalize on the country’s largest water basin, the Grande de Térraba River basin, in the center of the Southern Zone. The proposal now being considered would involve the relocation of 1,068 people and the flooding of indigenous land, according to the Costa Rican Electricity Institute (ICE), which oversees the production, transmission and supply of electricity in Costa Rica.

The 631-megawatt (MW) wproject, as currently envisioned, would be the secondlargest hydroelectric project in Central America behind a 660-MW project in Nicaragua, according to ICE, and is bringing the debate over Costa Rica’s energy policy to the forefront (see separate article).

Officials highlight the project’s importance to Costa Rica’s energy production: the dam would increase the capacity of the nation’s electricity infrastructure by 30%, which they say would allow the country to satisfy its growing internal demand, giving Costa Rica independence from fossil fuels. In addition, ICE officials say, Costa Rica would produce a surplus of energy for the first several years of Boruca’s operation that could be sold to other countries for a profit.

Those opposed to the dam say Costa Rica must find another way, and point to negative environmental and social impacts they say outweigh whatever benefits the huge hydroelectric project would bring.

According to the director of the Boruca project, Marco Tapia, the dam is still under consideration, and no final decisions will be made until studies of its potential environmental and social impact are finished.

However, the incoming executive president of ICE, Jorge Gutiérrez, recently told the business daily La República that beginning construction on the project is a top priority.

The Dam History

The idea of capitalizing on the Grande de Térraba River basin has been studied since the 1960s, and was proposed on a much larger scale in the 1970s. Most of the power that would have been generated in the original proposal was destined to fuel private aluminum production in Costa Rica. That proposal was abandoned in the early 1980s when the aluminum company withdrew its plans for business here and the international economic crisis made it unfeasible. It was again reconsidered in the early 1990s for the production of energy for exportation to Mexico, but “the conditions weren’t there” for the project to take off, Tapia explained.

The Boruca studies were taken up yet again in the late 1990s and in 2000 officials identified a section of the Grande de Térraba River as an ideal location for the dam, and put it at the top of a list of options under the name Boruca-Cajón option.

After extensive study, however, it was discarded last year in favor of a second option, called the Boruca-Veraguas option, which ICE claims would have less environmental and social impact than previous proposals.

The hotly protested Boruca-Cajón option – with a price tag of $1.4 billion – would have created a 10,700-hectare reservoir above a hydroelectric dam on the TérrabaRiver, approximately 13 kilometers east of Palmar Norte in the Pacific province of Puntarenas, near the small town Cajón (not to be confused with the larger Cajón, further north). The project’s potential would have been 709 MW, making it the largest hydroelectric project in Central America.

However, one third of the land to be submerged was indigenous land, and the project necessitated the relocation of multiple indigenous communities, whose leaders organized and protested the project (TT,March 9, 2001). ICE estimated that 1,943 people – including more than 800 indigenous people – would have been displaced, mostly Rey Curré inhabitants. According to information from the Ditso Association of Popular Initiatives, a nonprofit organization for indigenous and campesino rights, more than 1,000 indigenous residents would be directly affected.

Environmentalists charged that the dam would also harm the health of the Osa Peninsula, Costa Rica’s jewel of biodiversity.  A two-year study by the World Conservation Union found that the dam would endanger the 30,000-hectare Térraba-Sierpe National Wetlands downstream, fed by sediment and water from the Grande de Térraba River (TT, Oct. 8, 2004).

In addition, the reservoir would have rendered useless 36.2 kilometers of the vital

Inter-American Highway

, the principal overland shipping route through Central America, which would have had to be rerouted.

The Veraguas Option

A Colombian engineering firm contracted by ICE to evaluate the project recommended the electricity institute discard the Cajón option for some of the same reasons listed by opponents, and proposed the lesscostly Veraguas option.

This new proposal – at a reduced cost of $979 million – was put to ICE in 2004 and moved the dam further upstream onto the GeneralRiver, which joins with the Coto Brus to create the Grande de Térraba. With a small reduction in capacity to 631 MW, the dam’s impact would be significantly reduced, ICE officials say, particularly in terms of indigenous land.

The water from the reservoir would be released 13.2 kilometers southeast of Pilas, near Palmar Sur, after being diverted through a subterranean tunnel. The turbines for producing the electricity will be located inside this tunnel.

According to ICE, the Veraguas option would require the relocation of 1,068 people – less than 3% of them indigenous, and not a single indigenous community – and would flood only 657 hectares of indigenous land, (nearly 3,000 hectares less than under the Cajón option).

Tapia explained that the indigenous people who own the affected land, and others who would be affected by the dam, will be compensated – though exactly how must still be worked out and would be part of negotiations planned for later this year.

In addition to a lesser impact on people, the reservoir itself shrinks by more than 50% to 6,002 hectares under the Veraguas option, affects only 3.6 kilometers of the

Inter-American Highway

and would have a much lighter impact on downstream wetlands, according to ICE.

Despite these reductions in the dam’s impact, indigenous and environmental groups continue to oppose the Boruca Hydroelectric Project.

Environmental Concerns

Enrique Rivera, of the Térraba indigenous group, travels to different communities to speak out against the dam, attempting to counter what he characterizes as a betterfunded public-relations push by ICE in favor of the project.According to Rivera, the new option is no better than the old one. “In reality, the company is looking for less costs and less resistance,” Rivera told The Tico Times. “But the environmental effects are going to be the same.”

One concern that Rivera and others opposed to the dam mention is the effect it would have on the environment and people downstream. According to Tapia, the water level of the 21-kilometer stretch of the GeneralRiver downstream between the dam and where the General meets with the CotoBrusRiver to create the Grande de Térraba would be reduced to approximately 10% of its existing average volume.

Rivera said the decreased water levels would endanger the health of wildlife below the dam, as well as the livelihood of people who depend on those animals.

Tapia acknowledged that the stretch of river would not be able to sustain the same amount of life as before, but said that “hardly anybody” lives in the area, and ICE is still studying the potential impact.

Another concern is that the creation of a large reservoir would lead to climatic changes in the area. As the water sits still, the sun would heat sediment and vegetation that gets caught in the reservoir, and the decomposition would release greenhouse gasses into the air, Rivera explained. The indigenous leader warned that the average temperature of the area would rise, trees would die and there would be “many plagues of mosquitoes.”

This climate-change concern has been raised in the international debate over hydroelectric dams as well. The World Commission on Dams, an international commission that was formed to study hydroelectric projects, bought this up in its report, released in 2000.A research paper released in 2002 by the environmental organization International Rivers Network stated that some of the worst reservoirs in tropical countries “contribute many times more to global warming than coal plants generating the same amounts of power.”

The International Hydropower Association, a hydropower industry association, however, claims that “several alarmist publications” skewed the research by choosing the worst-case scenarios. The association also said most hydroelectric dams have significantly fewer emissions than fossil-fuel plants producing the same amount of electricity and have similar emissions to natural floodplains.

Tapia said that emissions on a large scale occur only when the reservoir is relatively shallow and the type of organic material “favors a decomposition that generates these gasses.” The Boruca dam, he said, would not have these conditions, except near the shore, where special measures would be taken to limit the effect, such creating shade for the shallow areas.

“I leave (the specifics) to the specialists,” Tapia said. “But they can take measures.”

Social Changes

Dam opponents have also raised concerns about the social impact of the dam.

Rivera worries that a construction project of the magnitude proposed by ICE would flood the region – which both he and Tapia characterized as one of the poorest in Costa Rica and lacking in many asic services – with outsiders. The area, he said, “is not prepared for this overpopulation.”

In addition to concerns about more alcohol and drug abuse as well as prostitution amongst the local population, Rivera said the influx of outsiders – which he says would be between 3,000-5,000 people – would threaten the cultural identity of the indigenous people living in the area, because they would likely begin stray from their traditional way of living.

The jobs, he continued, would mean more money for residents, but would only be temporary.

“The government is going to see the solution to (the area’s) development in employed work for ICE, and so they are not going to worry about productive programs for agricultural development,” Rivera said. “They have said that we are going to have a lot of economic advantages, but it isn’t true. There isn’t one guarantee at this moment that it’s true.”

Tapia says that many of the same concerns could be looked at as opportunities instead.

“What is the prospect that in the next 10 years, there is going to be an investment of this size in the area?”Tapia asked. “The project will improve the infrastructure – in roads, electricity, sewers, telecommunications and health.”

Tapia added that most workers could come from local communities, and ICE plans to offer training and education that will prepare workers to “reinsert” themselves in their traditional work, “but with better infrastructure and better opportunities.”

“If the negative impacts are more than the positive ones, we shouldn’t do the project,” Tapia said. “But our studies indicate that this is not the case. The effects are manageable and sustainable in the long term, and the opportunities for the people and the country are very big.”

What Next?

According to the Boruca-project director, ICE is steadily moving forward with the project, but is still in the researching phase and has multiple studies to conclude before it will be ready to make a concrete proposal to the people of the area. Tapia acknowledged that ICE still needs to speak more with communities ahead of the negotiations planned for later this year.

In addition, ICE has yet to decide on either a financing or management scheme for the plant (see separate box).

The soonest construction would begin is 2008, Tapia said, and the dam would begin to function until 2015 or 2016.


Boruca Project Financing

According to Marco Tapia, the director of the Boruca Hydroelectric Project, the Costa Rican Electricity Institute (ICE) has yet to decide on a model for the financing and management of the large and controversial dam. However, Tapia said three options are on the table:

Traditional: Under the traditional model, ICE would finance and run the Boruca dam as it has most of its other projects. According to Tapia, financing ($979 million under the most recent proposal) would likely come from an international financing agency such as the Inter-American Development Bank (BID).

Trust: Under this model, ICE would tap private financing for the project by selling either bonds or shares in the project. ICE would develop and own the project, while shareholders would receive dividends for their participation. ICE has used this model twice before, with the Peñas Blancas and Cariblanco hydroelectric projects.

BOT: Costa Rican law allows private interests to build and operate a hydroelectric plant and then transfer it to ICE under what is known as the BOT (Build, Operate, Transfer) method. Tapia said that a private group of investors could finance and oversee the  development and operation of the Boruca project for a set amount of time (perhaps 20-25 years), after which it would be transferred to ICE’s control and ownership. For this model to work, however, changes must be made to Costa Rican legislation. Law 7508, which establishes the BOT method in Costa Rica, limits such plants to a capacity no more than 50 MW, which the Boruca project exceeds by 580 MW.

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