Wind energy and power privatisation in Nicaragua

In September 2000 plans to bring wind power to Nicaragua were scuppered by the Inter-American Development Bank (IDB) which blocked the Spanish company IBERDROLA from providing this renewable resource.[1] The reason was that the value of the soon-to-be privatised national power company ENEL, would be significantly lowered, since the Spanish company would be able to provide substantially cheaper rates of power than ENEL. The foreign companies bidding to buy ENEL would therefore be allowed to continue to generate power, and pollution, from oil in old facilities which are constantly at risk of breakdown.

IDB officials threatened the Nicaraguan government with the stoppage of all IDB support should they proceed with the IBERDROLA deal. This was almost universally seen as a direct violation of Nicaraguan sovereignty. Despite strong opposition, however, the Nicaraguan government continued to privatise ENEL and agreed that a contract with the Spanish energy company would have negative impacts on the privatisation.

Outwardly, there were powerful interests which did not wish to see the conversion of an energy source that would liberate a country like Nicaragua from spending its scarce foreign exchange resources on importing petroleum to burn in inefficient and pollution-causing power stations.[2]


[1] Environmental Network for Central America (ENCA) (February 2001) ‘IDB blocks wind power in Nicaragua’, ENCA Newsletter No.28, pp.6-7.
[2] Nicaragua Solidarity Campaign (NSC) (Sept 2000) Eco-Alert correspondence, ‘Inter-American Development Bank Blocks Wind-Power in Nicaragua’, nsc@nicaraguasc.org.uk.