On August 10, 2012, MIGA issued guarantees of $16.3 million to Globeleq Mesoamérica Energy (Wind) Limited of Bermuda to cover its equity investment in Eolo Wind Farm in Nicaragua. The coverage is for a period of up to 20 years against the risks of transfer restriction, expropriation, and war and civil disturbance.
The Eolo project involves the construction of a 44 megawatt wind farm in Rivas Province on the shores of Lake Nicaragua. Eolo 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 approximately 169.6 gigawatt hours of electricity per year, without requiring any fossil fuel supply. The wind farm is expected to start operations by December of 2012 and the electricity 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. Additionally, reliance on thermal (oil-fired) generating plants has made the long-term marginal costs the highest in the region. This project aims to provide additional generation capacity that is not only renewable and clean, but also helps reduce the average marginal cost of generation, resulting in an overall reduced cost of electricity to users.
MIGA’s participation in the project is aligned with the agency’s commitment to support investment into into countries eligible for concessional lending from the International Development Association and investment in infrastructure.