The Inter-American Development Bank (IDB) is to make a loan of $30.3 million to Polaris Energy Nicaragua, S.A. (PENSA), the company building and operating the San Jacinto-Tizate Geothermal Power Project.
The aim is to promote an increase the capacity of the San Jacinto plant, which is located in the western part of the country, from the present 10 MW to a total of 72 MW.
It will also encourage geothermal plant generally in the country, which, although it sits on top of a chain of volcanoes, and is therefore in the ideal position to exploit geothermal energy sources, depends on oil and coal for its electricity even as it struggles to keep up with energy demand. However, the huge upfront exploration costs have so far hindered investments in this area.
The IDB aims to change that through the San Jacinto-Tizate Geothermal Power Project.
Expansion of the existing will be achieved by additional resource development and the installation of two new, higher capacity turbines.
Upon completion of the expansion, the San Jacinto plant, Nicaragua’s second geothermal plant, will produce enough energy to power nearly one out of every twelve homes in the country.
“This project is not just about expanding access to electricity. It is also about transforming the country’s energy matrix to reduce its dependence on fossil fuel imports and boost its long term competitiveness,” said Hans Schulz, general manager of the Structured and Corporate Finance Department of the IDB.
In a country where 40 percent of the energy is supplied by the private sector, the bank seeks to increase the role that companies play in developing renewable energy. The IDB sees the private sector as both an important source of financing and as an incubator for creative energy solutions.
The IDB has a long record of working in Nicaragua’s energy sector, with a special focus on sustainable and renewable energy. Recognising the need for broad, comprehensive policies, the bank has, for example, provided resources to support the preparation of the country’s National Sustainable Electrification and Renewable Energy Programme.
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