Nicaragua: billion-dollar hydro plant

A consortium of two Brazilian companies will in less than three years build a 250 megawatt hydroelectric project in Tumarin, Nicaragua, at a cost of $1.1 billlion.

"We are confident that Tumarín is a reality and we hope by 2018 to be in operation," said Valter Cardeal of Eletrobras, one of the companies.

Eletrobras and the Nicaraguan government in 2012 announced an identical project, which never went ahead.

On the other hand, the economic environment is more attractive now in Nicaragua, one of the few countries in the world with growing output between 2011 and 2014, than in the last four years of the economic boom of the previous decade.

To meet growing demand, Nicaragua needs to boost current capacity of 1.3 megawatts, lowest by far in the region.

For its part, the consortium has significant resources.

State-controlled Eletrobras is the biggest energy company in Latin America, and fourth in the world in clean generation.

Electrobras, which trades on the New York Stock Exchange, in 2013 had revenues of $12 billion.

Queiroz Galvão, a private company based in the state of Pernambuco, has operations throughout Latin America, including oil and gas, steel, cement, and environmental engineering.

Brazilian development bank BNDES is expected to finance a third of the project, with an additional $250 million coming from the Central American Bank for Economic Integration.

Eletrobras and Queiroz Galvao would finance the balance.