Dec 11, 2008
Nicaragua to boost electricity service with US$40.2 million IDB loan
Funds will help rehabilitate two key hydroelectric plants
Nicaragua will strengthen its electricity system by rehabilitating two major hydroelectric plants with the help of a US$40.2 million loan approved December 10 by the Inter-American Development Bank Board of Executive Directors.
The funds will be used for the rehabilitation of the Santa Bárbara and Centro América Hydroelectric Plants, the country main renewable energy generators.
"The full recovery of these hydropower plants will help improve the quantity, reliability, and quality of the renewable energy supply required for a sustainable economic growth in Nicaragua," IDB Team Leader José Ramón Gómez said.
The investments are part of an integrated Electricity Support Program, coupled with parallel investments in the electricity transmission and transformation areas and a loss reduction program. The repair and maintenance work will help guarantee and enhance the reliability of the current supply and meet mid-term demand of electricity, while strengthening the public sector’s institutional framework, he added.
This component will be carried out by ENEL, The national electricity company, and its affiliate HIDROGESA. The Nicaraguan Ministry of Energy and Mines and ENATREL, the national power transmission company will execute the other components of the Program.
This is the second loan for the program aimed at boosting Nicaragua's electricity system, after the IDB in December approved a US$32.7 million loan. The total cost of the Electricity Support Program amounts to US$144,2 millions and is supported also, with US$40.8 million in financing from the Central American Bank for Economic Integration and the European Investment Bank. The Nicaraguan government pledged an additional US$4.8 million for the project and the IDB's Board of Executive Directors could eventually approve $20 million in extra financing for the program in order to continue to improve the supply of electricity for residential and commercial clients.