$20 Milllion for Nicaraguan Power Grid

A $20 million concessional loan will help enhance power generation and distribution

Tuesday, July 7, 2009

The Inter-American Development Bank approved a $20 million concessional loan on June 30 to help improve the quantity, reliability and quality of the energy supply required for Nicaragua's sustained economic growth.

Loan proceeds will help make investments in transmission, transformation, and rehabilitation of power plants that are needed to guarantee and enhance supply and meet mid-term demand, and to strengthen the public sector’s institutional framework in the short term in order to boost electricity services.

The new lending is the third assigned to the program, which also seeks to promote the adoption of environmentally sustainable energy alternatives, including renewable sources such as wind power and biofuels.

Nicaragua's program has three components:

* Rehabilitation and expansion of Empresa Nacional de Transmisión Eléctrica's (ENATREL) transmission grid;
* Modernization of renewable energy projects that are the main power sources of Generadora Hidroeléctrica S.A. (HIDROGESA), a subsidiary of Empresa Nicaragüense de Electricidad (ENEL); and
* Adoption of steps to reduce energy losses.

All three components will help improve efficiency in the entire power system, from generation to distribution.

The program is part of Nicaragua's energy sector support strategy that calls for the rehabilitation of the 50-megawatt Santa Bárbara and Centro América hydroelectric plants, transmission and distribution systems improvements, and a series of technical-cooperation projects to develop wind power, biofuels, and energy efficiency programs.

“This program supports the Nicaraguan government’s efforts to create a more diversified and sustainable energy matrix while mobilizing additional co-financing resources and promoting climate change adaptation and mitigation activities,” said José Ramón Gómez, the IDB team leader on the project.

The IDB's lending consists of $10 million from the ordinary capital (OC) and $10 million from the concessional Fund for Special Operations (FSO). The OC tranche is for a 30-year term, with a 5-1/2 year grace period, and carries a variable interest rate; the FSO component is for a 40-year term, with 40 years of grace, and 0.25 percent interest.

The Bank's first loan for the program was approved in December 2007 ($32.7 million) and the second in December 2008 ($40.2 million). The European Investment Bank and the Central American Bank for Economic Integration are also contributing with funding, helping raise a grand total of $144.2 million for the program.

More on this topic

Nicaragua: Congress Ratifies $ 22 million for Rural Electricity

October 2011

The Legislature has approved an IDB loan to finance the National Program for Sustainable Electrification and Renewable Energy in Nicaragua (NPHS).

A press release from the National Legislative Assembly reads:

The program, which will support the transformation of the country's energy mix and increase electricity coverage, will be implemented by the Ministry of Energy and Mines, the National Electricity Transmission Company and the Nicaraguan Electricity Company and will offer over the next four years electricity services to 117,390 new users.

IDB Lends $22 million for Energy in Nicaragua

July 2011

The loan is aimed at the PNESER program for sustainable electricity and renewable energy.

The first loan, for $30.5 million, was approved on July 7, the bank is supporting Nicaragua with a total of $50.5 million. The PNESER project aims to support the transformation of Nicaragua’s energy matrix and increase electricity coverage in the country from 65 to 85 percent, benefiting 1.7 million people.

Nicaragua to transform its energy matrix and expand access to electricity

July 2010

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

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.

Nicaragua: $70 Million from IDB for Electricity Program

May 2010

The Inter-American Development Bank has given $70 million to the National Program for Sustainable Electrification and Renewable Energies.

This program requires a global investment of $350 million and aims to enable electrical power in 84% of the country by 2014, and to take the percentage of energy generated through renewable sources from 30% to 80%.

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