The Inter-American Development Bank (IDB) announced the approval of a $40 million loan to finance the second phase expansion of the San Jacinto-Tizate geothermal power project, which is being developed by a private sector company, Polaris Energy Nicaragua S.A. (PENSA).
Once completed, the combined first phase and second phase expansion will produce 72 MW (net), increasing Nicaragua’s overall electricity generating capacity by 7 percent through renewable sources, thus providing a stable and low-cost supply of electricity.
San Jacinto-Tizate is considered one of the highest quality geothermal resources under development worldwide.
As the second operating geothermal power plant in Nicaragua, the project will help demonstrate the viability of this renewable source, and is expected to stimulate more private sector investment in electricity generation.
The project supports Nicaragua’s efforts to change its energy matrix, bringing the total contribution from the country’s abundant geothermal resources to 15 percent of its total installed capacity, as well as to reach its target of 86 percent of electricity generation from renewable sources by 2014.
Completion of the second phase expansion is scheduled for December 2011 at an estimated cost of $177 million, which will be co-financed by a group of multilateral lenders, including the IDB.