Nicaragua remains one of the most attractive countries in Latin America for investment in renewable energies, according to “Climatescope 2013,” an annual report and index measuring the ability of 26 nations to foster low-carbon energy growth.
The report, produced by the Inter-American Development Bank and Bloomberg New Energy Finance, ranks Nicaragua third in the region––and first in Central America––for its “high penetration of renewable energies in the country’s energy matrix and the important influx of investment (in renewable energies) in proportion to the small size of its economy.”
Nicaragua, which ranked second to Brazil in last year’s inaugural report, ceded the number two spot to Chile in this year’s index, but continued to show its potential to compete with larger economies in the region.
According to the Climatescope 2013, Nicaragua’s installed capacity for renewable energies reached 36% last year, up from around 30% the year before. Nicaragua’s Ministry of Energy and Mines says that percentage has since grown to around 52% in 2013, meaning most of the country’s energy is now provided by renewable sources (compared to only 20% six years ago).
Nicaragua last year attracted $292 million investment in additional renewable energy production, as the country seeks to shift its energy matrix to 92% renewable by 2016. However, that goal appears increasingly difficult to attain due to continued setbacks to the $1.1 billion, 253 megawatt Tumarín hydroelectric plant, which is years behind schedule.
Yet despite the hydroelectric megaproject’s lack of progress, Nicaragua continues its renewable energy revolution with or without Tumarín.
“Since 2009 Nicaragua has invested approximately $919 million in renewable energy projects,” said Emilio Rappaccioli, Nicaragua’s Minister of Energy and Mines. “Just in wind power alone, projects such as Amayo, Blue Power, Eolo and ALBA have invested $450 million.”
Nicaragua’s largest geothermal plant at San Jacinto Tizate has invested an additional $420 million in expanding its output capacity in recent years, and another $40 million geothermal plant is scheduled to come online by 2016, the minister said. Meanwhile, the $45 million Hidropantasma and $65 million Larreynaga hydroelectric plants are scheduled to be ready for operation by the end of next year.
“Investment in energy has been one of the principal projects of this government since 2007 when the investment program was launched first to resolve the blackouts with bunker oil and then to start developing conditions for investment in green energy,” the minister said.
The government promises the national effort to switch to renewable energies will eventually reduce the cost of power in Nicaragua, although so far electricity costs for many homes and businesses have only gone up.