When locals learned of a $200 million solar power plant project to mine bitcoin in their village in northern El Salvador, some saw opportunities for employment, investment in infrastructure or simply to connect their home to electricity.
As the country marks a bumpy year since it made the digital coin legal tender, some hope the complex offers a brighter future while others have raised environmental concerns and doubts about whether locals in will benefit.
“When you get to a certain age, you see that no one ever gives anything without later benefiting from the people they give it to,” said Luis Alonzo Valle, a 66-year-old subsistence farmer.
El Salvador – one of the poorest countries in Latin America – last year became the first country in the world to adopt bitcoin as legal tender with the aim of stimulating the economy and helping citizens save on remittance fees.
The government has expressed support for solar energy farm projects powering a bitcoin factory in the village of El Gavilán, in the rural municipality of Nueva Concepción.
Officials say it will bring investment into the poor farming community and fulfill one of the Bitcoin Law’s goals of lifting Salvadorans out of poverty, adding that the solar farm can also help generate electricity for the national grid. .
Details remain scarce: the project was announced in June by Milena Mayorga, the Salvadoran ambassador to the United States, who said that Josué López – a Salvadoran investor based in Switzerland – was investing $200 million.
This forest is a lung not only for the community, but for the whole municipality. If we cut the little that remains, in what state will we leave the municipality?
José Gilberto Salguero, President, Municipal Development Association of Nueva Concepción
“It is an honor to be able to lead this project…I owe myself to El Salvador, and all investments from my fund will be aimed at benefiting our beautiful country,” López said in response on Twitter.
In separate postshe said his companies and business partners are spending $15 million on proof-of-concept projects around renewable energy and bitcoin in El Salvador which, when successful, are expected to open access to $200 million in funding of dollars.
Raul Peña, the mayor of Nueva Concepción, supports the project as a way to offset budget cuts. He said López contacted him and promised the area would get new roads and electrical connections to homes.
“If we saw it as something that would hurt us, we would be the first to oppose it,” Peña said.
“We see it more as an advantage.”
Environmental groups in the area have expressed concern.
The installation of the solar power plant could result in the clearing of approximately 74 acres (30 hectares) of forest, according to calculations by the local organization the Intermunicipal Association of Water and Sanitation of Nueva Concepción.
“This (forest) is a lung not only for the community, but for the whole municipality,” said José Gilberto Salguero, president of the Municipal Development Association of Nueva Concepción.
“If we cut the little that remains, in what state will we leave the town?
He expressed concern that the energy-intensive extraction process could also draw water to keep the material cool. Salguero feared it would divert water that farmers need for irrigation systems, risking crop damage and loss.
The project requires approval from El Salvador’s Ministry of the Environment, which then sends the permits to the mayor’s office.
The ministry said it had no record of a permit application, and Mayor Peña said they were awaiting confirmation of permission before construction could begin.
But Salguero said trees had already been felled at the site.
López did not respond to a request for comment. Bitcoin mining company Cowa and investment firm Lian Group, both affiliates of López, also did not respond to a request for comment.
President Nayib Bukele’s government says its bitcoin policy has attracted investment, reduced bank fees, increased tourism and promoted financial inclusion.
However, in the year since El Salvador adopted bitcoin as legal tender in September 2021, cryptocurrency values have crashed, scaring off investors and reducing the value of coin holdings. country digital.
The planned site of Bitcoin City – touted as a metropolis and tax haven for crypto investors and miners, fueled by an active volcano – is still a dense jungle.
Central bank statistics showed that less than 2% of remittances were transferred with cryptocurrency wallets between September 2021 and June 2022.
The International Monetary Fund called on El Salvador to reverse bitcoin status as legal tender, citing financial, economic and legal concerns.
The government said it stood by experience.
Announcing the Nueva Concepción project, Ambassador Mayorga said bitcoin “gives the world confidence” in El Salvador.
“There is a lot more to come in the country. It doesn’t stop,” she said.
Most residents of Nueva Concepción live from subsistence farming, ranching, and running small businesses. Many supplement their income with remittances sent from family to the United States.
Fredis Escobar, 43, who runs a general store in central Nueva Concepción, thought the investment would help small business owners.
“If there are more employees in our municipality, there is more money circulating,” he said.
“We’re all going to get some of that.”
Mayra Portillo, 36, a resident of El Gavilán who earns about $4 a day cleaning, said she was eager to improve her family’s living conditions, but changed her mind. opinion when it discovered that the project could harm the environment.
“If it’s going to affect us negatively, better not,” she said.
Many residents said they had not heard from project representatives, but were eager to hear more.
“If they helped us with solar panels to have our own electricity, that would be a huge help,” said Alex Santamaria, a father of two whose home is not connected to the electricity grid.
“They have to come here and ask, ‘What do you need in the community?’ “, he added.
“If they help the community, the community will be happy.”
This story was published with permission from Thomson Reuters Foundation, the charity arm of Thomson Reuters, which covers humanitarian news, climate change, resilience, women’s rights, trafficking and property rights. Visit http://news.trust.org/climate.