Nicaragua currently seeks funding from the World Bank and other international donors for a larger feasbility study program on 10 potential areas for geothermal power development.
Reported by our sister publication, Piensa Geotermia, Nicaragua is in talks with the the World Bank and other agencies in order to obtain funding for exploratory drilling to confirm the viability of existing geothermal resources in the country.
The country is seeking funding of $15-20 million from the World Bank (WB) to conduct feasibility studies for 10 geothermal areas in volcanic zones, which have been identified as geothermal resource areas with great potential.
Emilio Rappaccioli, head of the Ministry of Energy and Mines (MEM), said talks with representatives of the international financial institution to see “if somehow” available concessional resources are ongoing.
He explained that independent geophysical surface studies indicate there is a “pretty sure prospect” for the production of geothermal power, feasibility studies are required to confirm its viability.
These feasibility studies would involve drilling test wells on site, with “quite high” costs involved with no clear guarantee for success. With financing available through the World Bank or similar financial institutions, one could remove the high risk element of early resource confirmation and could attract investment from private sources later more easily.
Currently, the World Bank provides funding of $12 million to MEM for rural electrification projects, solar panels, small and mini-hydro and energy efficiency.
In recent four-day meetings of the International Development Agency (IDA) and the World Bank in Managua, Latin American representatives have called for the allocation of three percent of the total portfolio designed to support poor countries. But success in attracting development funding is not sure, since IDA donors-mainly from European countries, currently seem to prioritize the allocation of more resources to Africa.
In Latin America, only Nicaragua, Honduras, Haiti, Bolivia and the Caribbean islands receive IDA resources through the World Bank. It will be at the meeting in Moscow, Russia, in December to set the amount IDA replenishment for 2014-2017.