Mixing Water with Oil: Nicaragua Adds Hydroelectric Capacity to Its Power Portfolio

In Nicaragua, site preparation finally has begun for the 253-megawatt (MW) Tumarin Hydroelectric Power Plant—eventually, to be among the largest in the region. The project, which is expected to be operational by 2014, will cost about US$600 million.

The new power plant will be located on the Grande de Matagalpa river, in the northern region of Nicaragua. It will be equipped with three 84.33 MW Kaplan hydraulic water turbines .

In August 2008, Nicaragua's Ministry of Energy and Mines signed a letter of intent with Brazil national utility Centrais Eletricas Brasileiras, S/A (Eletrobras) to develop the Tumarin hydroelectric project in Nicaragua.

Three years later, after prolonged negotiations with the landowners, the project will be built and operated by a consortium led by two Brazil-based organizations—the utility Electrobras, and the construction and drilling group Queiroz Galvão. Financing has been provided by Electrobras and Queiroz Galvão, as well as Brazil’s National Economic and Social Development Bank (BNDES) and the Central American Bank for Integration.

Once completed, the plant will supply 25 percent of Nicaragua's energy demand—reducing the country’s energy budget by nearly 10 percent. The project will create approximately 6,000 direct and indirect jobs and is expected to have an impact of 2 percent on the country's gross domestic product (GDP) during the first year.

Part of the plan includes constructing a 30-mile road between the plant and the community of San Pedro del Norte in the South Atlantic Autonomous Region (RAAS, for its acronym in Spanish)—which currently are connected only by waterways.

“With this project, many of the people who live in nearby communities will [gain] access to food, health services, and transportation for the first time,”said Eliseo Nunez, president of the Infrastructure and Public Services Commission of Nicaragua's National Assembly.

Estimates from Nicaragua’s Ministry of Energy and Mines indicate that nation has a hydroelectric potential of 3,280 MW, of which only 98 MW currently is being utilized. This represents a major opportunity for companies interested in developing hydroelectric projects in the country.

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