CETRI
Introduction
Countries around the world need to replace fossil fuels with renewable energy. But in some of the world’s most impoverished countries, the companies developing this technology are too often repeating the colonial, exploitative practices of the fossil fuel companies that came before them.
The installation of solar parks across southern Honduras, for example, tells a tale of corporate profiteering and bullying under the guise of “sustainable development.”
During the narcodictatorship in Honduras that followed the 2009 military-backed coup, transnational corporations benefited from exorbitant incentives to attract investment in the renewable energy market. In practice, they cynically exploited the call for green technology to profit from deepening privatization, corruption, and dispossession in one of the Americas’ most impoverished countries.
Solar parks did not replace fossil fuels in Honduras. Rather, they expanded the energy matrix without democratizing access to electricity, significantly reducing emissions, or benefiting local populations. What resulted was a massive transfer of public resources to private investors — and overpriced electricity for ordinary consumers.
Hondurans ended up paying some of the highest prices for electricity in Central America, while financing the profits of Norwegian and U.S. corporations, Central American elites, and international development banks. Campesino communities who resisted some of these projects — for example the Los Prados project in the municipality of Namasigüe — faced violent repression, forced displacement, and criminalization.
After the narcodictatorship, former President Xiomara Castro’s government (2022-2026) passed reforms to rescue the state electricity company by addressing some of the worst excesses in contracts with private energy generation companies. In response, Norwegian investors Scatec, Norfund, and KLP Norfund Investments brought multimillion dollar arbitration claims against the country.
Under many trade agreements, some national laws, and contracts, transnational corporations have exclusive access — via an arcane process known as Investor State Dispute Settlement (ISDS) — to sue governments in private tribunals when they make decisions that affect their profit expectations. This contrasts starkly with the lack of access to justice for affected communities.
This report — produced by the Institute for Policy Studies, Transnational Institute (TNI), TerraJusta, Honduras Solidarity Network (HSN), Network of Women Human Rights Defense Lawyers (RADDH), Southern Social Environmental Movement for Life (MASSVida), and Caritas Choluteca — explores how these developments represent a kind of “green colonialism.”
