Nicaragua Plans to Reduce Dependence on Oil-based Energy to 3 Percent

Few decades ago the share of renewable energy in Nicaragua’s power generation was 70 percent but with growing ties with Venezuela and availability of cheap oil that number declined and now the country gets just 34 percent of its energy from renewable sources. But with the rising oil prices and increasing blackouts the government now seems to be falling back on the locally available and reliable renewable energy sources.
Having close diplomatic relations with Venezuela assured Nicaragua of sufficient oil supply for years but with oil peaking to $147 it became more and more difficult to shoulder the burden of rising energy costs. Although oil-based energy was cheaper than the energy produced from non-conventional sources, the fluctuation in oil prices started hurting the economy of the nation. The government of Nicaragua soon realised that oil-based energy sector is not sustainable in the given circumstances.

Nicaragua, one of the poorest countries in the western hemisphere, is blessed with a wide variety of renewable energy sources – wind, geothermal and hydel energy. The government is now looking to attarct foreign investors to help it develop projects which could eventually reduce the country’s dependence on oil for power generation to a mere 3 percent.

Russia, Iran and Brazil have come forward to invest in renewable energy projects in Nicaragua. A private capital firm, Arctas Capital Group, has invested in a $90 million wind energy project which will start generating 40 megawatts of energy from January. Nicaragua has six active volcanoes and therefore also experiences substantial amount of geothermal activity which it plans to tap through a 250 megawatt project to be build with the help of Russia.

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