The board of Polaris Energy Nicaragua (PENSA) and the Central America Bank for Economic Integration (BCIE) signed a credit agreement for US$77 million to expand electricity generation at the San Jacinto Tizate Geothermal Plant by 36 megawatts from its current 10 MW for a total of 46 MW by April 2011 and 72 MW by the end of that year. The project is being financed by a consortium of Canadian and Dutch banks and administered by the BCIE.

When its final phase is completed at a cost of US$149.5 million, the geothermal plant will produce 150 MW of electricity saving more than 540,000 barrels of oil a year and will create 260 permanent jobs. The first phase alone will save US$38 million in oil purchases.

Treasury Minister Alberto Guevara and BCIE President Silvio Conrado also announced the signing of a loan for US$22.9 million to finance construction of the Larreynaga hydroelectric dam which has the potential to produce 17 MW of electricity. This loan is on top of the US$36.7 million already approved for the project. President Daniel Ortega spoke of the need to gradually reduce dependence on oil but also said that a mix of oil, wind and hydro power would be required as it would not be possible to produce 100% of Nicaragua’s energy needs by geothermal generation.

Taken from Nicaragua News, 19.01.10, and El Nuevo Diario, 13.01.10.

Hot water brought to the earth’s surface includes arsenic, mercury, boron, antimony and salt, all of which may contaminate surface drainage water if not injected back into the earth, which fortunately is the customary practice.[i]

These fluids also contain a number of gases: CO2, hydrogen sulphide, methane and ammonia, all of which may contaminate the local atmosphere, although the CO2 emitted is a small fraction of the emissions of conventional fossil fuel plants. The hydrogen sulphide is also very small in quantity but may cause offensive smells locally.[ii]

Plant construction and drilling have been known to cause subsidence.[iii]

Many of Central America’s volcanoes are located within national parks and other protected areas, and this may be a potential source of conflict, as explained elsewhere in the website in the case of Costa Rica.

[i] KTH Research Project database (2005) ‘Arsenic in geothermal waters in Costa Rica, Central America’, http://researchprojects.kth.se/index.php/kb_7806/io_9338/io.html (accessed 12.07.11); Hartman Guido-Sequeira (2010) ‘Environmental Management in Geothermal Development: Case History for Costa Rica’, Proceedings World Geothermal Congress 2010.
[ii] Wikipedia (2011) ‘Geothermal electricity’, http://en.wikipedia.org/wiki/Geothermal_electricity
[iii] ClimateTechWiki, ‘Geothermal Electricity Production’, http://c,imatetechwiki.org/technology/geoth (accessed 19.07.11).