Manzanillo Gas & Power S.A.

According to project documents, the Manzanillo Bay Energy Project includes the design, development, construction, operation, and maintenance of:

• Two gas combined-cycle power plants with a net installed capacity of 430 megawatt each, totaling 860 megawatt. 
• Electricity transmission infrastructure to allow the power plants to inject power into the national grid. 
• Related infrastructure needed to receive natural gas from a floating storage and regasification unit, all located near the Manzanillo port in the Dominican Republic.

Associated facilities include the Floating Storage and Regasification Unit, intended to supply natural gas to the two Manzanillo Bay Energy plants, as well as to other national power plants, industry, and the country’s broader gas network. The project uses a seawater-based wet cooling system. 

According to official documentation, the original design of the project was modified due to the infrastructure risks posed by placing project facilities near a tectonic fault. Because additional analyses and design would extend the project’s original timeline, the proponents opted to proceed with a floating facility to meet the project’s schedule. The consortium developing the project — Manzanillo Gas & Power S.A. — is composed of Shell, Haina Investments Company, and Enerla. 

By supporting the Manzanillo Gas and Power project, the IDB is contributing to an expansion of infrastructure that will increase greenhouse gas emissions and lock the Dominican Republic into gas infrastructure for decades. The project’s financial and climate additionality remains unclear, given that it channels public finance toward one of the world’s largest oil conglomerates and further distances the IDB from its own climate commitments. It also downplays significant environmental and social risks, including potential impacts on communities and ecosystems in neighboring Haiti.

Categorization:

The project has been classified as a Category A operation according to IDB Invest’s Environmental and Social Sustainability Policy since it will likely generate the following impacts: i) air emissions, including greenhouse gas (“GHG”) emissions; ii) noise and vibrations, especially during construction; iii) wastewater discharge; iv) potential soil contamination; v) loss of habitat for terrestrial flora and fauna; v) impacts to marine biota (increased turbidity, noise, vibrations, and artificial lights); vi) landscape modification; vii) economic displacement (for  local beekeepers and goatherders); viii) social impacts (increased traffic and demand for basic services); ix) local employment opportunities and economic development (positive); and x) improved capacity and reliability of the national electricity grid (positive). Overall, these impacts are deemed to be of medium-to-high intensity.

General Concerns: 

• The project conflicts with the IDB’s climate mitigation commitments: The decision to proceed with the construction of a gas-fired power plant contradicts the IDB Group’s decarbonization policy. While the IDB’s Paris Alignment methodology allows for limited exemptions — provided the project does not undermine national climate commitments and is demonstrably the least-cost alternative — authorizing this gas infrastructure contradicts the general climate objectives of the IDB Group, its Paris Alignment methodologies, and risks locking the Dominican Republic into long-term dependence on natural gas. Given that combined-cycle power plants typically operate for 40–50 years, the project could create stranded assets over time and prevent the Dominican Republic from reaching its proposed 27% reduction in carbon emissions by 2030 and its aspiration of carbon neutrality by 2050 (NDC, 2020). It will also increase the country’s reliance on imported natural gas.
• Additionality: The financial, environmental, and social additionality that IDB Invest brings to the project remains unclear. Funding also comes from oil and gas companies and commercial banks, including: Haina Investments Company, Ltd., Enerla Energía de las Américas, Shell Gas and Power Development B.V, Coastal Petroleum Dominicana, S.A., Manzanillo Energy, S.A.S. and Lindsayca. Project documents suggest that the benefits of IDB’s support lie in the plant’s ability to “continuously supply natural gas to national power plants, industry, and the country.” However, the documentation does not include an alternatives analysis explaining why a fossil fuel solution was selected over more climate-positive options, such as solar or wind, which could provide a longer-term sustainable solution. 

Project-related Concerns:

• Transborder impacts and risks: The project’s environmental impact assessments are misleading in their evaluation of transboundary risks. The project site is situated on the coast, merely 1 km from the border with Haiti, which shares the western part of the Manzanillo Bay, where the gas terminal will be located. Project documents assert that the project is located entirely within Dominican territory and that transboundary impacts are precluded. Additionally, it claims that the navigation of liquefied gas transport vessels through national and international waters complies with relevant international navigation standards, further dismissing transboundary concerns. This conclusion is misleading, as accidental releases, contamination, and hazards in the marine environment, which are frequent in this type of project, would be transported by currents to neighboring Haiti. Documents do not mention any cumulative or transboundary impact assessment, whether Haiti provided consent, or if it was consulted regarding the project.
• Environmental risks to the power plant and gas infrastructure: Notably, the project’s ESIA was updated to avoid the dangers posed by placing fixed gas infrastructure near a seismic fault. This amendment included replacing the onshore LNG storage and regasification terminal with a floating unit, and changing the alignment of the service and gas pipelines. The region is considered highly vulnerable to seismic activity and hurricanes. Project proponents downplay the potential accidents at the project’s power plants and floating terminal during extreme weather events.
• Undervaluation of risks to critical habitats: The project location is adjacent to several protected areas. Parque Nacional Manglares de Estero Balsa (Estero Balsa Mangrove National Park) lies less than 1km to the east of the project, and the project’s port is located within the park’s legally established buffer zone. Additionally, the planned access route (and only possible access to the location) entails ships passing through the Montecristi National Park and Ramsar Site (Wetland of International Importance), which could be dramatically affected by ship fuel spillovers and increased traffic of large ships. Moreover, the buffer zone of Laguna Saladilla Wildlife Refuge, classified as an IUCN Category IV protected area, also overlaps with the project’s defined environmental boundary. The impacts and risks of this highly hazardous project are misrepresented in the environmental impact assessment.
• Negative impacts on biodiversity and pollution: Project documents indicate that construction of the plant will require clearing forests, mangroves, and underwater ecosystems, which threatens biodiversity through habitat loss, fragmentation, and degradation. Additional concerns include increased risks of fires and air pollution (including particulate matter and gas emissions). The Thermal Plant’s use of a Wet Cooling System that relies upon seawater is also concerning since it increases the possibility of thermal and chemical pollution, entrapment of fauna, and changes in salinity, all which will affect marine ecosystems.
• Analysis of alternatives: The alternatives analysis states that “no project location alternatives are analyzed … after a prior definition of the land where the project will be built (was) imposed by the Dominican State as a sine qua non condition.” However, the IDB Invest Environmental and Social Safeguards guidelines suggest  an analysis of alternatives should be conducted early in project preparation for projects that are likely to have significant adverse environmental or social impacts (Category A), prompting evaluations of alternative locations, technologies, or project designs to avoid or minimize negative impacts. According to the IDB Invest ESS, if there is a lack of alignment between national regulations or requirements and IDB Invest standards, the more stringent measures should prevail.

Financing involves a $200,000,000 loan.

Our partner organization is Red del Gran Caribe.

IDB Invest should urgently reassess its involvement in the Manzanillo project and initiate a divestment process, as continued support for the project conflicts with the IDB Group’s development goals and climate commitments. This high-risk project has proceeded without a comprehensive assessment of environmental impacts, which are extremely high considering the risks inherent to project operations (shipment and regasification of liquefied natural gas, gas pipeline, thermal generation, transmission, and storage), and its proximity to National Parks and other internationally recognized environmentally sensitive areas (Ramsar sites). These concerns also include unmitigated risks to critical biodiversity and potential transboundary environmental impacts. A responsible divestment, coupled with clear remediation measures and ongoing monitoring, is necessary to uphold the institution’s accountability and alignment with international climate and environmental standards.

ENG – Letter to IDB Invest on Manzanillo

SPA – Carta IDB Invest en Manzanillo