NEW REPORT: The Dark Side of the Energy Transition: Green Colonialism in Southern Honduras
For immediate release
Press contacts below
Tegucigalpa, Honduras – On May 26, 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 released a new report, “The Dark Side of the Energy Transition: Green Colonialism in Southern Honduras,” which exposes how corporate profiteering and strong-arming under the guise of sustainable development have shaped the installation of solar parks across southern Honduras.
This analysis is based on a meeting with affected communities in Choluteca, Honduras in July 2025, and examines in-depth how transnational investors have exploited the global green energy transition discourse to profit from privatization, corruption, and dispossession in Honduras, one of the continent’s most impoverished countries. Norwegian, Canadian, and U.S. corporations, Central American elites, and a Norwegian public development finance institution have all exploited this situation to their benefit.
The new report highlights four ways that green colonialism operates in the context of solar parks in southern Honduras: (1) solar parks that have hobbled the state electricity company, maximizing profits for private renewable energy providers via long-term supply contracts at exorbitant prices for the Honduran people; (2) $1.205 billion USD currently in international arbitration claims against Honduras that the energy sector can leverage to negotiate project expansion and discourage the government from enacting community-supported environmental protection measures; (3) denial of marginalized communities’ self-determination, even as they face significant harm from deforestation, rising temperatures, and loss of access to productive land and water sources due to these solar energy projects; and (4) solar projects that have added to the existing energy matrix and benefited private corporate interests and consumers instead of replacing fossil fuel-based power generation and addressing local communities’ unmet energy needs.
During the narco-dictatorship, the corporate-backed government in Honduras extended exorbitant subsidies to these private companies while forcing the state power company to buy electricity from them at exorbitant rates. Hondurans ended up paying higher power bills while public coffers were emptied. Worse still, the projects often harmed local communities, who were met with repression when they resisted.
When the democratically elected government of former President Xiomara Castro reformed these practices, multinational corporations sued the Honduran government for another exorbitant sum — a clear effort to undermine democracy.
“The transmission lines pass over the villages, but they are thinking about big industry, not about the villages – about profits for them and not for us,” explained German Chirinos of the Southern Social Environmental Movement for Life (MASSVida).
“These solar parks, like other renewable energy projects in Honduras, did not replace fossil fuels – instead, they expanded the energy matrix and worsened the financial crisis of the state energy company without democratizing access or benefiting local populations. What climate agreements and global development policies promised as a path to a sustainable future, Honduran communities experienced as international backing for a narco-state, corruption, and corporate looting with solar panels,” said report co-author Karen Spring of the Honduras Solidarity Network.
As the report highlights, those transnational investors can also wield a powerful tool to deter resistance to their energy projects: they can use the Investor State Dispute Settlement (ISDS) system to sue national governments in private tribunals when they believe that a government’s protective measures, often resulting from community pressure, harm corporate profit margins. When former Honduran President Xiomara Castro’s administration enacted reforms to revert some of the worst excesses in contracts with private energy generation companies and to rescue the state electricity company, Norwegian, U.S., Central American and Canadian investors slapped Honduras with hefty arbitration claims. Honduras currently faces $1.205 billion USD in international arbitration claims from the electricity sector.
“The strategy of criminalizing and paralyzing community members who are defending their territories is similarly being used against the Honduran government in the form of ISDS,” stated Denia Castillo, an attorney with the Network of Women Human Rights Defense Lawyers (RADDH).
The report focuses on the Los Prados project belonging to Norwegian investors Scatec, Norfund (a public development finance institution), and KLP Norfund Investments. From 2017 to 2019, at least 59 environmental and land defenders were criminalized for opposing the project, successfully stopping six of nine solar parks that make up this large-scale project from going into operation. Ten defenders are still required to report monthly to Honduran courts to ensure they fulfill their bail conditions as they await trial.
Meanwhile, their complaints against corruption and irregularities in the approval of solar energy contracts and permits have not advanced. Community members continue to denounce harms from deforestation, rising temperatures, and loss of access to productive land and water sources.
“These solar parks in southern Honduras represent a prime example of green colonialism,” said report co-author Luciana Ghiotto of the Transnational Institute. “Instead of treating Honduran communities as sacrifice zones for the global economy, further marginalizing and impoverishing them, we need to demand true climate solutions that grant local communities meaningful input and control over the development and approval of energy projects that will benefit them.”
“ISDS stacks the deck in favor of corporate interests, in stark contrast with the lack of access to justice for affected communities,”explained co-author Jen Moore of the Institute for Policy Studies. “Our report adds to the growing body of evidence that this international arbitration system serves as a profound obstacle to climate, environmental, and tax justice in Honduras and beyond.”
The stakes are particularly high at the moment, in the wake of the inauguration of Honduran President Nasry Asfura, as Honduras risks a return to the deeply harmful and corrupt narco-dictatorship policies that led to the original approval of the existing solar parks.
Already, there are indications of a return to those harmful policies. Although Castro’s government withdrew Honduras in 2024 from the most frequently used tribunal for ISDS lawsuits, the International Centre for Settlement of Investment Disputes (ICSID), Asfura’s Trump-backed government returned Honduras to ICSID on their first day in office in January 2026.
Among key recommendations, this analysis makes a compelling case that the Honduran government should cancel the Los Prados project out of respect for the self-determination of the affected communities, and the Norwegian company Scatec should stop the persecution of environment and land defenders. Additionally, the Public Prosecutor’s Office should investigate the 33 complaints filed against public officials for irregularities and acts of corruption, including alleged ties to organized crime, in the approval of contracts for photovoltaic parks.
The report also concludes that the Honduran government must:
- Alongside corporations’ home governments, oblige corporations to provide reparations for harm to local communities and to the environmental and land defenders who have suffered years of persecution for their peaceful resistance,
- Exit the ISDS investment protection framework
- Work toward a just, democratic energy model based on community and public control.
Full report: https://ips-dc.org/report-dark-side-of-the-energy-transition
Executive summary highlighting key findings and recommendations: https://ips-dc.org/summary-dark-side-of-the-energy-transition
Report co-authors and researchers and representatives of local Honduran communities are available for comment and interviews in both English and Spanish. Contact IPS Deputy Communications Director Olivia Alperstein at olivia@ips-dc.org.
Press contacts:
Olivia Alperstein, Institute for Policy Studies, olivia@ips-dc.org
Jen Moore, Institute for Policy Studies, jen@ips-dc.org
Karen Spring, Honduras Solidarity Network, karen@hondurasnow.org
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