Project will reduce greenhouse gas emissions, increase generation capacity, and lower electricity costs
View the press release in Spanish
Washington, September 5, 2012—The Multilateral Investment Guarantee Agency (MIGA)—the political risk insurance arm of the World Bank Group—today announced that it is supporting renewable energy in Nicaragua through a guarantee backing Eolo de Nicaragua S.A., a 44-megawatt wind farm in Rivas province. This wind farm will decrease greenhouse gas emissions, address the need for additional generation capacity in the country, and reduce the cost of electricity for the country. This project represents the first time MIGA is insuring an investment in wind power.
MIGA’s guarantees of $16.3 million for a period of up to 20 years cover an equity investment by Globeleq Mesoamérica Energy (Wind) Limited (GME Wind) of Bermuda.
The Eolo de Nicaragua project consists of 22 Gamesa G90 2-megawatt wind turbine generators, as well as the facilities and equipment required to connect the generators to a high-voltage substation. It is estimated that Eolo will be able to generate 170 gigawatt hours of electricity per year, without requiring any fossil fuel supply. Electricity produced by the wind farm will be purchased by local distribution companies Distribuidora de Electricidad del Norte, S.A. (Disnorte) and Distribuidora de Electricidad del Sur, S.A. (Dissur).
Nicaragua’s electrification rate is among the lowest in Central America and reliance on thermal (oil-fired) generating plants has made the long-term marginal electricity costs the highest in the region.
“The Eolo wind farm fits very well with MIGA’s efforts to support complex infrastructure investments that will underpin economic growth,” said Jason Zhengrong Lu, MIGA’s senior underwriter who worked on the transaction. “Through our guarantees, we are helping one of the poorest countries in the hemisphere increase the availability of electricity—cleanly and cheaply,” noted Izumi Kobayashi, MIGA’s Executive Vice President. She continued, “We are also pleased that MIGA is insuring a wind power project for the first time, as we are committed to supporting renewable energy projects.”
“Private investment in the Nicaraguan energy sector can help boost its economic and environmental sustainability,” said Rodolfo Echeverria, GME Wind’s CFO. “MIGA’s political risk insurance helps us mitigate the perceived risks to the project, and as such, the guarantees have been critical for us to move the investment forward.”
MULTILATERAL INVESTMENT GUARANTEE AGENCY
A Member of the World Bank Group
1818 H Street, NW, Washington, DC 20433
Mallory Saleson, MIGA
Tel: +1 202 473-0844
Rebecca Post, MIGA
Tel: +1 202-473-1964
Cara Santos Pianesi