Volatile Oil Prices Spurs Nicaragua To Spend Limited Capital On Renewable Projects

National Economy

The population of the Republic of Nicaragua is approximately 6.81 million people[1]. In 2020, 88.91% of the people in this Central American country had access to electricity[2].

In 2021, Nicaragua’s economy was ranked 122nd in the world in gross domestic product (GDP)[3]. The country’s economy is dependent on the export[4] of gold, t-shirts, coffee, insulated wire, beef, rolled tobacco, crustaceans, and raw sugar.

Environment Policies

In October 2017, Nicaragua signed the Paris Climate Agreement.[5] Nicaragua initially refused to sign the agreement, because the greenhouse gas emission commitments were nonbinding.

Power Generation Capabilities

In 2020, utilities[6] used renewable energy (56.0 %) and oil (44.0 %) to generate electricity in Nicaragua. Biomass, geothermal, wind, and hydropower are the primary types of renewable energy used to generate electricity in Nicaragua.

Recent renewable energy projects in Nicaragua include:

  • 100 MW Solar Project – Germany solar company, Soventix is continuing work on the Nicaragua Solar PV Park project at a site approximately 10 miles northeast of the nation’s capital, Managua. The project is forecast to be commissioned by year-end 2024.
  • 100 MW Hydropower Modernization Project – In December 2021, the government of Nicaragua announced the completion of the successful rehabilitation and modernization of the Centroamérica and Santa Bárbara hydroelectric plants.
  • 37.8 MW Wind Project – Chilean company, Consorcio Eolico Amayo are continuing work on the third phase of the Amayo onshore wind project, which is located approximately 30 miles southeast of Managua.


Nicaragua imports all of the nation’s refined petroleum for transportation and power generation. In 2020, the nation spent[7] U.S. $282 Million for imported refined petroleum.

On 24 February 2022, Russia invaded Ukraine, prompting the United States, Canada, and the European Union to place embargos on Russian exports. As a result, the international price for crude oil has increased by over 50% from May 2021 to May 2022.

Nicaragua has significant undeveloped renewable energy resources, including solar, hydropower, geothermal, onshore wind, offshore wind, and biomass. However, civil unrest and a weak economy has limited Nicaragua’s ability to rapidly develop the nation’s vast renewable energy resources.

Soaring oil prices is causing Nicaragua to spend all available financial resources on the development of renewable energy.

Jack Kerfoot

Website – “Our Energy Conundrum”

www.jack kerfoot.com


Jack Kerfoot is a scientist, energy expert, and author of the book FUELING AMERICA, An Insider’s Journey and articles for The Hill, one of the largest independent political news sites in the United States. He has been interviewed on over 100 radio and television stations from New York City to Los Angeles on numerous energy related topics.

[1] Republic of  Nicaragua  Population (2022) –  November 3, 2022, www.worldometers.info

[2] World Bank, Access To Electricity (% Population) – Nicaragua

[3] Gross Domestic Product By Country 2021 – Worldometer

[4] The Observatory of Economic Complexity (OEC) – Nicaragua

[5] Carbon Brief “Paris 2015: Tracking Country Climate Pledges”

[6] Our World In Data, Nicaragua : Energy Country Profile by Hanna Ritchie and Max Roser

[7] The Observatory of Economic Complexity (OEC) – Nicaragua

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