The European Investment Bank (EIB) has granted a USD 70 million loan to the Republic of Nicaragua to finance investment designed to upgrade the country’s power transmission grids. The finance contract was signed today in Managua by EIB Vice-President Magdalena Álvarez Arza and Nicaragua’s Economy Minister, Alberto José Guevarra.
Vice-President Álvarez, who is in charge of the EIB’s operations in Latin America, stressed that “in signing this loan the EIB is taking a further step in its support for environmentally friendly, quality development in Nicaragua. This project will improve people’s living conditions by providing them with access to a stable, quality power grid while at the same time bringing substantial environmental benefits by helping to increase the share of renewables in the energy mix”.
This four-year national programme is designed to provide rural areas with electricity and develop new renewable energies contributing to climate change mitigation and adaptation. The EIB will be supporting the sixth of the programme’s seven components – power transmission.
The loan will finance the expansion and upgrading of the power supply system, increasing its efficiency, improving the reliability of the service and augmenting the share of power generation from renewable sources such as hydro, geothermal and wind.
The project consists of the installation of around 640 km of new transmission lines, the construction of nine new substations and the upgrading of existing lines and substations by enhancing their capacity and voltage.
This operation will support the national programme’s goals of i) increasing the electricity service’s coverage of rural areas from 65% at present to an estimated 90% by 2020 and ii) generating 90% of electricity from renewables.
The programme is being cofinanced by other financing institutions and has received a grant from the EU’s Latin America Investment Facility.
The EIB is granting this loan under the current Latin America mandate, which enables it to support climate change mitigation and environmental sustainability projects.
Background information:
The European Investment Bank (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 other countries in Asia and Latin America, central and eastern Europe, the Balkans, the Mediterranean and Africa, the Caribbean and the Pacific. Its lending operations outside the European Union form part of the Union’s policy of cooperation with those countries.
The EIB has been providing loans in Asia and Latin America since 1993 under three successive mandates. Under the current ALA IV mandate for the period 2007-2013, 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.