Due to be completed in 2012, 900MW La Parota will be one of Mexico’s biggest dams, flooding swathes of forest and subsistence farmland around the Papagayo river with a basin ten times the size of Acapulco’s famous bay.

Mexico’s state-owned CFE electricity utility says communities around the proposed site of the La Parota dam in the southwestern state of Guerrero have signed in favour of the project, but opposition groups have gone to a local court saying the signatures were obtained unlawfully.

La Parota, a huge project aimed in part at generating power for the fast-growing resort of Acapulco, will cost about US$1B and should start operating in 2012. CFE hopes to invite bids for its construction as soon as February.

The dam would boost Mexico’s power supply as national demand grows, especially in Acapulco and Mexico City. Central America is also keen to buy Mexican electricity.