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The creation of a national electric grid started in 1958 with the construction of two 69 kV power lines from Managua to Granada and from Managua to León and Chinandega. Until the early 1990s, the electricity sector in Nicaragua was characterized by the presence of the State, through the Nicaraguan Energy Institute (INE), in all its activities.
The Nicaraguan electricity system comprises the National Interconnected System (SIN), which covers more than 90% of the territory where the population of the country lives (the entire Pacific, Central and North zone of the country). The remaining regions are covered by small isolated generation systems.
Currently, hydroelectric plants account only for 10% of the electricity produced in Nicaragua. The public company Hidrogesa owns and operates the two existing plants (Centroamérica and Santa Bárbara).
The World Bank has currently one Off-grid Rural Electrification (PERZA) project under implementation in Nicaragua. The US$19 million project will receive US$12 million funding from the Bank in the period 2003โ2008.
This high contribution to emissions from electricity production in comparison with other countries in the region is due to the high share of thermal generation. Currently (November 2007), there are only two registered CDM projects in the electricity sector in Nicaragua, with overall estimated emission reductions of 336,723 tCO 2 e per year.
Financing sources for rural electrification are limited. The National Fund for the Development of the Electricity Industry (FODIEN) receives its resources from the concessions and licenses granted by the Nicaraguan Energy Institute (INE). However, funds have been insufficient.
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