After the National Assembly modified the Law for the Promotion of Electricity Generation with Renewable Sources and its reforms, clean energy generators will be able to negotiate the lowering of current prices and in exchange they will receive five additional years of tax exemption.
The initiative, urgently submitted by President Daniel Ortega, exposes the voluntary negotiation process being carried out with electricity generators from renewable sources for the benefit of the Nicaraguan population and the country's economic sectors, the National Assembly reported.
Through the creation of four new state-owned companies, President Ortega seeks to control the exploration and exploitation of oil in Nicaragua, as well as the import, storage, distribution and marketing of gas and fuels.
With the approval of the law initiatives, the government seeks to transfer the control that Alba de Nicaragua S.A. used to have in this market.
The reform proposal to Nicaragua's Energy Stability Law contemplates the elimination of the tax on the purchase and sale of electricity for users who generate their own energy and decide to market their surpluses.
On November 21, the Ortega administration sent to the National Assembly the initiative, which seeks to exonerate from the marketing tax, generators who sell their surplus electricity to Disnorte-Dissur.
In Nicaragua, a reform to the Hydrocarbon Supply Law was approved, which allows thermal generators to "freely" import fuels derived from hydrocarbons.
In relation to the approved reform of urgent character, Patricia Rodriguez, expert in energy, explained to Elnuevodiario.com.ni that "... it is not clear what will be the role of the Nicaraguan Company of Petroleum (Petronic) nor why the refinery of the company Puma Energy will stop producing full oil to generate electric energy."
Until 2023 renewable energy projects in Nicaragua may opt for the exemption of import duty on machinery and equipment, VAT, income tax and municipal taxes.
The National Assembly approved a reform proposed by the Ortega administration to extend the term of tax benefits for energy generation projects with renewable sources.The law established that the maximum period to opt for exemptions was January 2018, but now they will remain in place until January 2023.
In Nicaragua, the Ortega administration is proposing to extend tax benefits for energy generation projects using renewable sources for another five years.
Continuing with the strategy of promoting energy generated from renewable sources, the government is proposing extending tax incentives for these types of projects, as it did in June 2015.At that time, the benefits were extended until January 2018.
Approval has been given for a loan to build transmission lines that will connect the hydroelectric plant Tumarin Phase II with the National Load Dispatch Center in the municipality of Managua.
From a statement issued by the National Assembly of Panama:
Members of the National Assembly approved on March 1 a loan decree agreed with the European Investment Bank, EIB, which will be used to finance the construction of transmission lines to connect the hydroelectric plant Tumarin Phase II with the National Center Load dispatch in the Municipality of Managua.
The IDB is providing $40 million in financing for construction of power substations in the north and $90 million for renovation of roads in Jinotega and Chontales.
From a statement issued by the National Assembly of Nicaragua:
$40 million for electrical substations
A $40 million loan signed with the Interamerican Development Bank (IDB) was approved on February 16 by the plenary, which will be used to fund the construction of three new substations.
The National Assembly has approved a bill which reduces electricity rates for consumers using more than 150 KW, using the savings generated by low oil prices.
From a statement issued by the National Assembly of Nicaragua:
The plenary of the National Assembly passed in extraordinary session, with 63 votes in favor and 23 against, a bill on Variation of Consumer Electricity Rates establishing a reduction in the energy tariff, using the savings arising from lower oil prices worldwide.
The Assembly has approved the amendment to the law that gives the state a 10% share of all concessions for exploration and exploitation of geothermal resources.
Unlike the hydrocarbons reform law, this amendment was adopted unanimously, giving the Nicaraguan Electricity Company authorization to represent the State in the exploration and exploitation activities of geothermal resources that are carried out in the country.
In the Legislature a bill is being introduced that gives the state a minimum holding of 10% in energy projects of over 100 MW.
With the reform of the law of Exploration and Exploitation of Geothermal Resources compulsory state participation in these projects is authorized. Companies in the sector believe that "... giving the state minimum participation will not jeopardize investments."
The adoption of the amendments to the hydrocarbon law provides for the participation of the state run company Petronic in exploration activities and the ability to partner with other companies engaged in the activity.
The amended law authorizes Empresa Nicaragüense de Petróleo (Petronic) to represent the State in the exploration and exploitation of oil and "... make 'associations and partnerships with companies who come to explore and exploit hydrocarbons.'"
A proposal has been made to amend the Special Law on Exploration and Exploitation of Hydrocarbons in order to further extend search deadlines from 5 to 10 years for the operating period and from 1 to 6 years for exploration.
In order to provide longer time frames for exploration and mining stages, the President has sent to the National Assembly a proposal to reform the Special Law on Exploration and Exploitation of Hydrocarbons.
The National Assembly has approved a loan from the European Investment Bank to expand electricity coverage in rural areas.
The government plans to implement the project in 3000 rural communities in different areas of the country, including the Caribbean coast. With this investment in the power grid coverage is expected to increase in rural areas from its current 64% to 86%.
The Executive is proposing a reform of the law on exploitation of geothermal resources to extend the period of the concessions granted to foreign companies from 25 to 30 years.
In order to encourage investment in the energy sector, the reform of the "Law on Exploration and Exploitation of Geothermal Resources" , sent by President Daniel Ortega to Parliament also proposes increasing the extendable term requested from the State by companies with exploitation rights, from 10 to 30 years.