Guatemala City, Jul. 25 - Guatemalan coffee producers are looking for financing to sell power from small hydroelectric plants on their farms to the national electricity grid, but some fear the costs of the effort would be too high.
Christian Rasch, the president of Guatemala's coffee growing association Anacafe, said with the financing the coffee industry could help the country meet its energy needs.
"The coffee industry now generates a little more than 50 megawatts of electricity but production could easily rise to over 500 megawatts if we can take advantage of new sites," he said. "We need funds to connect transmission lines."
Many coffee farms in mountainous, rainy Guatemala have rivers flowing through their land, some with small hydroelectric plants generating enough electricity to process coffee during the six-month harvest season.
But Anacafe wants to modernize and expand that capacity by seeking loans from the Central American Bank for Economic Integration to connect the farms to the country's electric system.
The coffee farmers could then sell energy for a profit to the private companies that control Guatemala's electricity business.
Hurt by a drastic drop in world coffee prices at the beginning of the decade, many farmers in the region have been looking for ways to diversify production so their survival is not solely dependent on the volatile coffee market.
Guatemala faces a future power shortage as demand for electricity outpaces supply, said Sergio Velazquez of the national energy commission.
The Central American nation will have to add 125 megawatts every year to meet projected demand of 3,125 megawatts by the year 2020, he said.
Coffee farmers see their small plants as an alternative to large hydroelectric dams, which have met serious community opposition from local villagers who fear land loss.
In April, over 100 mostly Mayan villagers voted in a plebiscite to reject the proposed $350 million, 181 megawatt Xalala project in the jungle region of Ixcan, near the border with Mexico.
But the costs of connecting small hydroelectric plants, some with outdated technology, may be prohibitive for many farmers interested in the plan.
"All along the south coast there are installations from the 1930s and 1940s that are very well made with 100, 200 or 300 kilowatts of capacity," said coffee plantation owner Jorge Samayoa.
"When there is no harvest they produce energy that nobody uses, but to connect such small amounts is very expensive," he said, citing a cost of around $500,000.
"If all the neighbors in the area pool our resources we could do it together," he said.