The film, which will be shot in Luxemburg, Germany and South America, is set during the Chilean military coup of 1973, according to the Hollywood Reporter.
'Colonia' follows a young German couple - Lena and Daniel - who become entangled in the violence which led to the overthrowing of the democratically elected president Salvador Allende.
Daniel is abducted by the secret police of army chief and dictator-to-be Augusto Pinochet, and is tracked by Lena to a sealed-off area called Colonia Dignidad ('Dignity Colony'), led by preacher Paul Schafer. It soon becomes clear that the commune is being used as a torture and detention center.