According to estimates, Nicaragua generated 50.6% of its power from renewable sources, of which 30% was geothermal in 2015.
Nicaragua is estimated to have 1,500MW of geothermal potential.
IDB said that the energy demand in the country has been increasing in recent years, rising from 2.6% in 2014 to 4.6% in 2015.
IDB will fund $51.4m for the development of the geothermal energy in the country while a further $25m will come from the Korea Infrastructure Development Co-financing Facility in Latin America and the Caribbean, which is managed by IDB.
Additionally, the Clean Technology Fund (CTF) and the Scaling Up Renewable Energy in Low Income Countries Program (SREP) will grant $17m while the remaining $10m will be local counterpart funds.
Nicaragua will use a portion of the funds for site investigation and determine the technical viability of exploiting the geothermal potential of the Cosiguina field in northwestern part of the country.
Additionally, a transmission infrastructure will also be constructed to help enhance energy service delivery while concluding Nicaragua’s adjustment to the regional energy transmission system SIEPAC.
