Will the IDB Invest effectively address harm as it develops a responsible exit plan for two hydroelectric projects in Guatemala?

In a historic move, the private sector arm of the Inter-American Development Bank (IDB), the IDB Invest, will design a responsible exit plan to accompany its divestment from two large hydroelectric projects in Guatemala. For the plan to adequately remedy harm, it is vital the IDB Invest collaborates with the project-affected communities in the preparation and implementation of the exit plan.

Following the report of the IDB’s Independent Consultation and Investigation Mechanism (MICI), the IDB Invest has divested from the San Mateo and San Andrés hydroelectric projects located in the Yichk’isis (Ixquisis) micro-region of Guatemala. As required by recommendation 29 of the MICI report, the IDB Invest will develop, in consultation with project-affected communities, a “transition plan,” commonly referred to as a responsible exit plan. This is in accordance with the affected communities’ request that the institution withdraw its investment, and marks the first time that the IDB Group will prepare a responsible exit plan as a result of a complaint lodged by project-affected communities. 

As the IDB Invest-financed projects caused significant harm to the local Mayan Indigenous communities and environment, it is crucial the IDB Invest consult affected communities and facilitate their participation in the development and implementation of the exit plan. Currently, the Management Action Plan indicates that the IDB Invest will develop a transition plan through a collaborative process that consults in a culturally and gender appropriate manner with leaders of project-affected communities, preserving the security of participants. According to the MICI recommendation, the plan should also be guided by the principles of do no harm, transparency, and aim to prevent escalation of social conflicts and risks of reprisals. 

We commend the IDB Invest for including these meaningful activities in the Management Action Plan when addressing recommendation 29: 

  • Carrying out a gender impact assessment to evaluate the gendered impacts the project caused or exacerbated in the communities. 
  • Implementing a professional training and developing an investment program focused on project-affected women to enhance empowerment and financial inclusion in the area
  • Providing technical assistance to restore the cultural heritage of communities. 

Further, to address MICI’s recommendations for structural changes at the institutional level, the IDB Invest plans to strengthen the environmental and social safeguards unit, especially regarding Indigenous Peoples, and will establish a zero tolerance policy for gender-based violence, which will be included in the contractual conditions of operations approved by the IDB Group. 

Communities welcome these measures but have emphasized that consultations to design the responsible exit plan should consider all harms the MICI report identified and offer viable solutions to address such harms. Particularly, the IDB Invest needs to remedy the harms inflicted to the social fabric in the Yichk’isis region, including increased social conflict amongst groups on the ground, as well as harms to Mayan Indigenous Peoples and their ancestral cultural heritage, disproportionate impacts on women, and the lack of environmental mitigation and consequent environmental degradation.  

The IDB Invest has the potential to turn this case into a positive example of what can be achieved when the institution and the community work together. We hope the IDB Group will fully engage with affected communities and act to effectively remedy the harm caused to the Yichk’isis communities and the environment and incorporate civil society’s recommendations on responsible exit.      

For more information on the IDB Invest’s responsible exit plan, please see AIDA’s press release