Nicaragua to transform its energy matrix and expand access to electricity

IDB concessional loan will benefit 1.7 million people and develop new sources of renewable energy, contributes to $381 million multi-donor program

Friday, July 9, 2010

Nicaragua has embarked on a historic program to transform its energy matrix and expand access to electricity among the poor with help from a $30.5 million concessional loan approved on July 7 by the Inter-American Development Bank.

The loan will contribute to an unprecedented multidonor program lead and coordinated by the IDB that will provide up to $381 million in loans and technical cooperation to Nicaragua. Also contributing to this program are the World Bank, International Finance Corporation, Spanish Agency for International Development Cooperation, the Korean Exim-bank, Latin America Investment Facility, European Investment Bank, Central American Bank for Economic Cooperation, Climate Investment Fund and the Nordic Development Fund.

Nicaragua’s National Sustainable Electrification and Renewable Energy Program (PNESER, for its initials in Spanish) will execute projects under the program over the next four years as part of a comprehensive strategy designed to transform the electricity sector. The overarching objectives will be to address Nicaragua’s lack of electricity in rural areas, insufficient transmission and grid infrastructure, systemic inefficiencies, high dependence on fossil fuels and lack of investment for renewable sources.

Specifically, PNESER will

* expand the rural electrification to 117,000 new users (702,000 persons) in 3,666 communities;
* normalize 164,000 households (984,000 persons) that currently have illegal electricity connections;
* install 214 KM of new transmission lines for renewable sources of energy such as wind and geothermal;
* support the installation of 2 million efficient bulbs in residential sector and 20,000 in the public sector as part of a National Energy Efficiency Program

Nicaragua, which has one of the lowest rates of electricity coverage in the region, is expected to increase the population with access to electricity from 65 percent currently to 85 percent its within 4 years, benefiting 1,7 million of habitants.

For Nicaragua, having a single comprehensive and well-coordinated energy program offers critical advantages over the traditional approach in which each donor funded separate projects.

According to the team leader, José Ramón Gómez, “ this project is an excellent example of cooperation among multilateral institutions and bilateral funds that will leverage public funds in the most effective way and result in a coherent program to advance renewable energy deployment in the developing world. Additionally such coordination reduces the overall administrative costs and allows a Government to deal with one instead of 10 different projects and a multitude of donors in the same sector”

In seeking to promote private sector investment in the large potential of renewable energy sources in Nicaragua, the program will also finance feasibility studies that could result in 358 MW of renewable energy.

Investments
to improve the efficiency of the electricity transmission system are expected to save enough energy to meet the needs of all of the 1.7 million new electricity consumers. Nicaragua will be able to expand electricity coverage by 20 percent without increasing its overall electricity consumption.

More on this topic

Nicaragua: $103 Million for Renewable Energy

September 2016

Using an IADB loan electrical substations will be built and a technical feasibility study made for exploitation of the geothermal potential in the field of Cosigüina.

From a statement issued by the Inter-American Development Bank:

Nicaragua will be expanding its levels of renewable energy generation and improving the electricity transmission system through a US $103.4 million financing project from the Inter-American Development Bank (IDB).

Funding for Renewable Energy in the Region

February 2014

Countries may submit projects to the Inter-American Development Bank and the Japanase International Cooperation Agency in order to apply for funding.

From this week the International Cooperation Agency of Japan (JICA) and the Inter- American Development Bank (IDB ) will be looking at various opportunities to fund renewable energy and energy efficiency in the region.

$ 190 Million for Geothermal Power Plant in Nicaragua

November 2010

The IFC will provide $ 50 million and mobilize an additional $ 140 million to support the construction of a new geothermal power plant.

This plant is the largest project in Nicaragua in over 25 years in this sector. This initiative will foster the generation of renewable energy, expand electrification and help reduce the country's dependence on imported fuels.

Nicaragua to expand geothermal energy with IDB help

August 2010

A $40 million loan will support the expansion of the San Jacinto-Tizate project, boosting power generation capacity

The Inter-American Development Bank (IDB) announced the approval of a $40 million loan to finance the second phase expansion of the San Jacinto-Tizate geothermal power project, which is being developed by a private sector company, Polaris Energy Nicaragua S.A. (PENSA).

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