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IDB approves $22 million loan to improve electricity service in Nicaragua

Second loan in a multidonor program will benefit 1.7 million people

The Inter-American Development Bank (IDB) approved the second loan, for $22 million, for Nicaragua's National Sustainable Electrification and Renewable Energy Program (PNESER, for its initials in Spanish).

The first loan, for $30.5 million, was approved on July 7, bringing total Bank support for this program to $50.5 million. PNESER aims to support the transformation of the country’s energy matrix and increase electricity coverage from 65 percent to 85 percent, which will benefit 1.7 million people

Over the next four years PNESER will provide service to 117,390 new users, totaling 702,000 people, in 3,666 rural communities. The second loan will help finance electricity service connections to 6,762 of these homes. Service will also be normalized for 164,000 households, totaling 984,000 people, who currently have illegal electrical connections. The second funding will also benefit 20 settlements, where electricity service will be normalized for 5,419 homes and provided to an additional 2,415 homes previously lacking connection to the power grid.

The program will also support the construction of 214 kilometers of new transmission lines that will carry renewable energy resources such as wind and geothermal. Funding will be provided for renewable energy generation initiatives, energy efficiency programs, improvements to the transmission system, and strengthening of isolated systems served by the Nicaraguan electricity company.

PNESER seeks to transform lives by improving the quality of life for the more than 1.7 million Nicaraguans who will benefit from the program. It will also seek to lower electricity costs for families through reducing dependence on fossil fuel-generated electrical power, according to José Ramón Gómez, IDB project manager.

PNESER could receive up to $404.3 million in external funding, coordinated by the IDB, from the Nordic Development Fund, Korean Eximbank, Latin American Investment Facility, European Investment Bank, Central American Bank for Economic Integration, World Bank, International Finance Corporation, and the Spanish Agency for International Development.