The European Investment Bank (EIB) is providing USD 20.4 million for the Nicaraguan Government’s programme of rehabilitation and upgrading of key parts of the country’s power sector. The finance contract was signed this morning in Medellín (Colombia) by EIB Vice-President Carlos Costa and Nicaragua’s Finance Minister, Alberto Guevara.
At the signing ceremony, Vice-President Costa stressed the importance to the project of the cooperation between the three financial institutions, the Inter-American Development Bank, the Central American Bank for Economic Integration and the EIB, which made it possible to offer Nicaragua a tailored financial package.
The loan will help to finance the rehabilitation of two hydropower plants in north-east Nicaragua and the extension and upgrading of the power distribution grid, including lines and substations, in the north-east of the country and near the capital Managua with the aim of increasing the grid’s capacity and reliability. A third component of the project is the preparation of studies on new investment in renewable energies.
The EIB is providing this loan under its current lending mandate for Asia and Latin America (ALA IV). The project meets the mandate’s priority objectives of greater energy security and environmental sustainability. This is the EIB’s first direct loan in Nicaragua.
At this time of economic crisis the EIB is continuing to provide finance in Latin America under its mandate, to ensure that eligible viable projects are not jeopardised.
The EIB is the EU’s long-term financing institution promoting European objectives. Created in 1958, it operates in the 27 EU Member States and more than 130 countries in Asia and Latin America, central and eastern Europe, the Balkans, the Mediterranean region, Africa, the Caribbean and the Pacific. It provides loans outside the European Union in the framework of the EU’s development assistance policies.
The EIB has been providing loans in Asia and Latin America since 1993 under three successive mandates. Under the current mandate for the period 2007-2013 (ALA IV), it is authorised to lend up to EUR 3.8 billion to finance i) operations supporting the EU’s presence in the region through direct investment and/or the transfer of technology and know-how, and ii) climate change mitigation projects. The EUR 3.8 billion breaks down into indicative amounts of EUR 2.8 billion for Latin America and EUR 1 billion for Asia.