Inter-American Development Bank to finance $103.4m renewable power project in Nicaragua

11 September 2016 (Last Updated September 11th, 2016 18:30)

Inter-American Development Bank (IDB) is financing a $103.4m project in Nicaragua, which will boost its renewable energy generation capacity and improve the power transmission system.

Inter-American Development Bank (IDB) is financing a $103.4m project in Nicaragua, which will boost its renewable energy generation capacity and improve the power transmission system.

The project will support site investigations to ascertain the technical feasibility of exploiting geothermal potential in the Cosigüina field in northwestern Nicaragua, including activities such as commercial-width well exploration. In addition, mechanisms will be developed to attract private investment and help boost the country’s geothermal generation.

Last year, 50.6% of the Central American country's energy generation came from renewable sources and of this 30% was geothermal. There is an estimated geothermal potential of 1,500 MW in the country and only 10% has been leveraged.

"Nicaragua has witnessed a growing demand for power, increasing by 2.6% in 2014 and 4.6% in 2015."

In recent years, Nicaragua has witnessed a growing demand for power, increasing by 2.6% in 2014 and 4.6% in 2015.

Construction of transmission infrastructure and electrical substations will boost delivery of energy services to Nicaragua, meeting current and future demand and completing the country's adjustment to the regional energy transmission system SIEPAC.

Of the $103.4m financing, IDB will provide a loan for $51.4m. A further $25m will be sourced from the Korean infrastructure development co-financing facility in Latin America and the Caribbean, which is managed by the IDB.

Of the remaining amount, $17m will be provided as grants from the Clean Technology Fund (CTF) and the Scaling Up Renewable Energy in Low Income Countries Program (SREP), and $10m through local counterpart funds.