Managua, Nicaragua, August 20, 2008—
IFC, a member of the World Bank Group, and Compañia Cervecera de Nicaragua, S.A. have signed an agreement to develop the El Salto YY hydroelectric project to address Nicaragua’s severe power shortage. This is the first project in Latin America to be funded by IFC InfraVentures, which helps develop infrastructure in the world’s most economically disadvantaged countries.
IFC InfraVentures is a $100 million fund that addresses major constraints to private investment in infrastructure projects, including a lack of funds and experienced professionals. It provides early stage risk capital and actively participates in the development phase to create private infrastructure projects that are commercially viable.
The El Salto YY is a 25-megawatt hydroelectric plant under development in northeastern Nicaragua. It will provide more efficient and reliable power and reduce the country’s reliance on fossil fuels. IFC InfraVentures will cover up to 20 percent of development costs and will work jointly with Compañia Cervecera de Nicaragua to develop the project.
Nicaragua faces a significant power shortage and rising electricity costs. About half of the people and two-thirds of rural households lack access to electricity. The new hydroelectric power plant will be the country’s first in more than thirty years to be financed entirely by the private sector.
“Insufficient and expensive power is a major barrier to Nicaragua’s economic growth,” said Jaime Rosales Pasquier, General Manager of Compañia Cervecera de Nicaragua. “Working with IFC will enable us to provide better, more reliable power at a lower cost, helping increase the country’s competitiveness and reduce dependence on imported fossil fuels.”
“As the first IFC InfraVentures’ investment in the region, El Salto Hydro underscores our commitment to promoting renewable energy as a viable alternative for improving access to power in developing countries,” said Bernard Sheahan, IFC Director for Infrastructure.
“This investment reflects our commitment to the private sector’s role in improving the quality and availability of power in Nicaragua,” said Atul Mehta, IFC Director for Latin America and the Caribbean. “We intend to scale up our involvement in the country’s power sector where government policies support private participation.”
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that people should have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit
www.ifc.org
.
About Compañia Cervecera de Nicaragua, S.A.
Companía Cervecera de Nicaragua was founded in 1926. Located in Managua, the capital city of Nicaragua, the company has been producing export-quality beverages for more than 70 years. Investing in renewable energy is part of the company’s program to help Nicaragua achieve sustainable economic growth and development. Other recent investments include building the country’s first world-class hospital and a tuition-free trade school for low-income people.
