Nicaragua - 2010 - San Jacinto

Financing the extension of the San Jacinto geothermal power plant

Context
Nicaragua’s power generation rate figures among the lowest in Central America due to its obsolete and limited generation fleet. In 2009, only 55% of the population had access to electricity. In order to face demand, which increases by 6% a year on average, the country has no choice but to import fossil fuels from neighboring countries. Yet Nicaragua holds considerable geothermal potential thanks to the Maribios Volcanic Range on the Pacific coast.
 
Project start-up: 2010
Financing: $18.9m senior loan
Partner: Polaris Geothermal Inc. / Ram Power
Project objective
The financing PROPARCO is putting up for the project to extend the San Jacinto geothermal power plant will increase Nicaragua’s power generation capacities and allow it to face the supply deficit. It will also help reduce the country’s energy dependence (hydrocarbon imports) and diversify its energy mix.
 

IMPACTS
The project will develop renewable energy generation in Nicaragua.

It will also have a positive impact on local development and will help create 500 permanent jobs on the site.
 
The project is in line with the Clean Development Mechanism and will help avoid the emission of 280,000 tCO2eq of greenhouse gases.
Project description
PROPARCO has supported the project to finance the extension of the San Jacinto geothermal power plant, which is located at 20 km from Leon, Nicaragua’s second largest city.
PROPARCO, alongside IFC, IDB, FMO, BIO, DEG, OeEB and CABEI, is participating in financing the senior loan syndicated by IFC via a US$18.9m loan (out of a total of US$140m) with a 13-year maturity. This financing will allow the power plant to raise its generation capacities from 36 to 72 MW.  

The total installed capacity of the San Jacinto power plant will account for 12% of available capacity and will make a 20% contribution to domestic power generation. This project is PROPARCO’s first deal in the infrastructure sector in Central America.