Local April 8, 2016 | 12:40 pm

Indybay.org cites Dominican Today reports on embattled coal plants

The Dominican Republic National Committee to Combat ClimateChange (CNLCC) has written to French Bank Societe Generale, among others, overtheir funding of the new Punta Catalina coal plant. A contract was signed bythe bank on 23 December 2015, just 11 days after the Paris Agreement on climatechange was concluded at COP21. The coal project is mired from corruptionallegations in Brazil affecting the firm contracted to build the plant, plustransparency allegations in the Dominican Republic, and against the wishes andneeds of the local population in Peravia Province (south).

The letter (PDF)(en) to Societe Generale, dated 6 April2016 and published on the Friends of the Earth France website, asks forclarification of contractual arrangements and states:

"There are a number of significant risks involved inthis project, including:

1. Allegations of corrupt practices connected with thetendering process for the project persist, as do growing concerns about thefinancial burden the project could represent for taxpayers.

2. Environmental and health impacts for the localpopulation and the associated risk of social conflict.

3. The threat posed to the climate in general and toSociété Générale’s credibility as a supporter of urgent climate action."

The 770 megawatt coal-fired Punta Catalina power stationproject is being promoted by the Dominican Corporation of State ElectricalCompanies (CDEEE). The project includes the construction of a coal terminalwith a capacity of 80,000 tonnes, as well as related facilities such asconveyors, cooling water systems and water treatment, and a power substation.Total cost is calculated at USD$2 billion, although there are allegations thisis an inflated estimate.

On 31 December 2015 Société Générale participated in thedisbursement of $200 million, the first instalment of a total amount offinancing from European lenders for the Punta Catalina project expected toreach $632.5 million. Other European banks funding the project include DeutscheBank, ING, Santander and UniCredit.

However, the contract was dependant on a related loanagreed with the National Bank for Economic and Social Development of Brazil(BNDES) to co-finance the project, and this money has not been received due tocorruption allegations in Brazil.

"You should be aware that BNDES is currently unable toexecute this loan as it is being investigated by the Attorney General of theFederal Republic of Brazil for its role in a corruption scandal involvingPetrobas and alleged influence peddling." advises the letter.

Under the contract with the European Banks the initialpayment received by the Government of the Dominican Republic should have beenreturned by 31 March 2016.

The CEO of Dominican Republic’s State-owned ElectricUtility (CDEEE), Ruben Jimenez Bichara, commented on the delay in theconstruction of the Punta Catalina coal-fired power plant, being built byBrazilian firm Odebrecht. He advised that it was ‘an internal process inBrazil, which in his view, is politically-motivated, with “distorted” information’according to a report in Dominican Today.

In February 2016 the The National Committee to CombatClimate Change (CNLCC) asked Justice minister Francisco Dominguez toimmediately open an investigation into the ties between the allegedly balloonedcosts of the coal-fired plants at Punta Catalina, the Brazilian contractorOdebrecht and political adviser Joao Santana since 2012, during theadministration of Dominican Republic’s ruling party (PLD).


During a human chain protest outside the State-ownedelectric utility (CDEEE), the organization urged Justice Minister Dominguez toseek collaboration with Brazilian authorities to gather evidence on the PuntaCatalina contracts with the Brazilian transnational Odebrecht, the loan for theproject by Brazil’s BANDES bank, as well as the contract with Santana.

“This is all part of an ‘all-inclusive’ that benefits theexisting public-private mafia in both countries,” the group said, and calledthe scandal ‘Joaogate." reported the Dominican Today website.

Dominican president Danilo Medina met with Brazil’s ForeignMinister last year and was warned that an investigation was underway into thelinks and malicious behavior of Odebrecht overvaluing the Punta Catalina coalplants by around one billion dollars and influence-peddling in the BANDES bankloan for the project.

There are also allegations made in January 2016 byprominent Dominican attorney Namphi Rodriguez, a specialist in constitutionallaw, that the so-called "hidden contract" to build two coal-firedpower plants violates the Constitution and the Public Procurement Law. Heargues that it was an attempt to turn a power of attorney from president DaniloMedina into an authorization, ignoring the principles of transparency,objectivity, equality and publicity, reports Dominican Today.

In March 2016 Energy and Mines minister Antonio Isa arguedthat the Punta Catalina coal-fired plants will lead to lower electricity costsand lower greenhouse gas emissions, but that coal generation wasn’t the idealmodel, for which renewable energies must be developed.

"It will replace others that spew more (greenhousegases), obsoletes, apart from improving the cost of the energy matrix, makingit more feasible. But that is not the model we’re going to copy, we will nowwager on cleaner renewable energy," Isa said. He identified a need forrenewable energy funding. "A funding mechanisms must be created toencourage investment in such to development."

The argument for building new coal plants, or gas plantsfor that matter, is spurious as renewable energy generation systems continue tofall in price. Once built these coal plants will continue to emit GreenhouseGases for their expected lifetime operation of 40 years. If closed early, theywill be stranded assets costing the Dominican state, while the contractbuilders and banks pocket the profits from the loans to build the project.

Local Community opposes coal plants

The local community expressed their opposition in October2014 at Bani city Hall. They articulated that the local population lacksdrinking water and irrigation, despite increased dam levels. Instead ofrationalizing water, it is all diverted to the city of Santo Domingo. The newcoal plants are also likely to rely on this water supply to the detriment oflocal farmers.

At Bani Town Hall people argued that under the pretext ofsolving the blackouts, the pollution from the coal-fired plants will pose athreat to people’s health, the environment, farming and livestock in theprovince.

"Neither Bani nor other Peravia province communitieshave been given the opportunity to decide whether to suffer pollution’sconsequences caused by the plants being built at Punta Catalina. Theauthorities have made no effort to seek less-polluting fuels other than coalfor these plants," they said reported Dominican Today.


In a protest later in October 2014, hundreds of farmers,home-makers and community leaders gathered on a Wednesday in the main park ofthe town of Paya, with trucks and tractors, with empty pots and buckets, todemand water and the halt of the coal-fired plants being built in Peraviaprovince (south). According to the report in Dominican Today, the rally haltedtraffic on the Southern Highway for more than three hours. The Riot police weredeployed, but after some tense negotiations, protest leaders agreed to suspendtheir protest.

In February 2015 the citizens of Paya township in PeraviaProvince (south), which would be the community most affected by the ash fromthe coal-fired plants being built at Punta Catalina, held a protest organisedby the Paya Development and Defense Committee (CODEPA) and supported by thePeravia Province Health, Environment and Agriculture Defense Committee, theMarco A. Cabral Canal Rescue Committee, the Banilejos Farmers Federation(FECABA), the Popular Bloc and other Paya, Bani and Peravia Provinceorganizations.

They complain that some houses haven’t gotten a drop ofwater in their homes for more than one year.

“While the state spends hundreds of millions of dollars ina coal plant to crucify the people of Paya, various community sectors don’treceive water for not having a few thousand pesos to repair Paya’s aqueduct andbecause the government has yet to finish the Provincial aqueduct where theyhave squandered more than five billion pesos and now turns out that not asingle penny appears to conclude it,” the organization said according to aDominican Today Report.

The National Committee to Combat Climate Change (CNLCC)urged in their letter to Societe Generale in April 2016 to reconsider involvementin the project.

"We also urge Société Générale to seriously reconsiderits involvement in the Punta Catalina coal plant project, and ultimately endyour support for it. This, we believe, should start with the provision of apublic commitment stating that your institution will not participate in theforthcoming scheduled payments for the construction of the project," saysthe letter.

Coal out of synch with Dominican Republic 2030 vision

The Dominican Republic submission (PDF) to the UNFCCC outlinesa vision for 2030, but this sustainable development vision does not fit withbuilding new coal plants for electricity.

The INDC states a target Reduction of 25% of base yearemissions (2010) by 2030. "This reduction is conditional upon favorableand predictable support, feasible climate finance mechanisms, and correctionsto the failures of existing market mechanisms".

The proposed level is ambitious. The Dominican Republic isa middle-income country, however, it faces a number of development challenges,such as: poverty, education, health, security, etc., that exacerbate thechallenge of adaptation and decoupling emissions from the economy.

In terms of emissions, the Dominican Republic representsless than 0.1% of global emissions. Per capita emissions are below the averagefor Latin America and the Caribbean region (4.9 tCO2e). However, the emissionstrends of some economic sectors are important, especially transport, energy,manufacturing and construction, waste and agriculture.

It is obvious Dominican Republic needs developmentassistance with renewable energy to help meet it’s 2030 vision and supplyelectricity to meet demand and avoid the current blackouts that occur. Buildingcoal plants does not help either the country and it’s population, or the globalcommunity, in meeting emissions reduction targets.

Clearly funding a coal plant in the circumstances ofcorruption surrounding the main Brazilian contract builder, the questionabletransparency arrangements in the Dominican Republic, and against the local communityneeds should be heeded.

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