Nicaragua Tackles Energy Shortages with Rationing, New Agreements

Boosted by a series of new energy agreements, President Daniel Ortega is predicting that the blackouts plaguing Nicaragua will be fully solved by the beginning of next year. Meanwhile, the energy shortages are showing some signs of easing.

Nicaragua experienced record power deficits in early July, as roughly one-fifth of the energy needed to run the country failed. The outages left some cities in the dark for as long as 12 hours, causing businesses and government offices to shut their doors early.

Unión Fenosa, the Spanish-owned company that provides power to the country, has enacted emergency rationing schemes to make up for the energy deficits. Cities go dark at planned hours of the day or night. Unlike previous attempts, this time the schedule has remained surprisingly consistent. Most places have full power on the weekends.

Although there have been fewer blackouts so far this year compared to last summer, Nicaragua is currently producing about 323 megawatts of energy, well short of the 571 megawatts needed to power Central America's largest country. Out of 14 power plants, only two are working at full capacity.

Experts say the problems stem from poorly maintained plants and high oil prices, which are especially troublesome, since nearly 80% of the power grid here runs on fuel. Unión Fenosa, however, claims that the root problem is theft. Company officials recently reported that about 27% of its energy is pilfered via illicit use.

As part of a new agreement with Unión Fenosa, the Nicaragua National Assembly plans to enact a new law to penalize electricity theft, which goes unpunished in Nicaragua. The legislative body also recently approved new funding to buy additional power and install new generators.

Cuba, Venezuela, and Taiwan have all agreed to donate emergency generators, while Iran recently announced plans to build a $120 million hydroelectric plant here. The blackouts aren't over, but perhaps there's a light at the end of the tunnel.

Your Latin America Insider,

Suzan Haskins
for International Living

P.S. If you're interested in Nicaragua, you can get the scoop in Panama. That's right, Panama…