San José, Costa Rica, since 1956

Gov’t Unveils Plan to Expand Electrification

The Sandinista government has announced new plans to expand electricity coverage to 3,666 rural communities, increasing Nicaragua’s total coverage from 66 percent to 88 percent of the population over the next four years.

President Daniel Ortega last week unveiled the National Plan for Sustainable Electrification and Renewable Energy (2010-2014), which will be funded by an investment of $381 million from various international lending institutions, including the Inter-American Development Bank and the Central American Bank for Economic Integration, each of which is providing $75 million.

In addition to increasing infrastructure to bring electricity to rural communities, the plan also provides resources for the rehabilitation and modernization of the aging state-run Central America and Santa Barbara oil-burning power plants.

After inheriting a state plagued by major energy deficiencies and daily rolling blackouts, the Sandinista administration – with the help of Venezuela and international lending institutions – has made resolving the energy crisis a priority.

Thanks to a series of oil-fuel generators and several smaller renewable energy projects, Nicaragua has nearly doubled its energy production over the past three years – an achievement the Sandinista government touts with great enthusiasm.

Yet it’s the government’s relatively unsung achievement of expanding electricity coverage to the rural poor that is, in many ways, an even more remarkable feat.

Since the Sandinistas returned to power in 2007,the government has increased electricity coverage in Nicaragua from 52- to 66percent, according to President Ortega. That effort alone represents the highest electrification rate in Nicaragua’s history.

César Zamora, president of the Corinto Power Plant – the second largest in the country – says that expanding electricity coverage in the countryside is the “government’s most important and least publicized achievement.”

“This is the first significant expansion of electricity coverage in 50 years,” Zamora told The Nica Times this week. “This is the only government that has done this.”

Indeed, not even the revolutionary Sandinista government in the 1980s expanded electrification significantly, due to the war and the continuous sabotage attacks against electrical towers by contra raiders.

The last major electrification expansion happened in the 1960s under former dictator Anastasio Somoza. But even then,the percentage of people connected to the electrical grid was never much morethan half the population.

In 2004, the government of Enrique Bolaños proposed a similar rural electrification plan, which aimed to increase coverage in the countryside from 40 percent to 90 percent by 2012. But problems with privatization of energy distribution, which was sold to Spanish company Unión Fenosa, hampered the $150 million plan, as funds got diverted to cover debts.

Other governments have put the issue of rural electrification on the back burner and never given it the attention it deserves, Zamora said. But, he added, the Sandinista government has “understood the problem and acted on it.”

And the results, Zamora said, have been “incredible.” Despite a global economic recession, energy consumption in Nicaragua has increased by 11 percent this year, he said.

While some of that increase is due to new factories opening this year (see separate story), it’s also due to the dramatic increase in domestic consumption as more rural homes connect to the grid.

The Move to Renewable Energy

The government is also making strides in its shift to renewable energy sources.

When the Sandinistas took office in 2007, less than 25 percent of the energy produced in Nicaragua was renewable, while nearly 80 percent came from oil.Three years later, thanks in large part to the $150 million Amayo wind project in Rivas, renewable energy has increased its market share to around 30 percent.

But the biggest plans are yet to come. In the next seven years, the government hopes to expand hydroelectric production by 597.7 megawatts, geothermal production by 100 megawatts and wind production by 100 megawatts.

If all goes according to government plan, 90percent of Nicaragua’s energy will come from renewable sources by the year2017.

The centerpiece of the government’s renewable energy revolution is the Tumarín Hydroelectric dam, an $800 million project that will provide 25 percent of Nicaragua’s total energy demand by the time it is operational.

The Tumarín project, which was approved by the regional government of the South Atlantic Autonomous Region (RAAS) last October, will provide 250 megawatts of energy, becoming the single largest power plant in Nicaragua.

The Central American Bank for Economic Integration has already pledged $252 million towards the Tumarín project, and the Development Bank of Brazil has pledged another $342 million.

The project will most likely be managed by Brazilian firm Queiroz Galvão, whose board of directors visited Nicaragua last October to meet with President Ortega and express interest in the project.

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