The SDGs from an energy perspective in Nicaragua

The Sustainable Development Goals (SDGs) adopted by the United Nations in 2015 aim to combat extreme poverty and integrate and balance three essential dimensions of sustainable development: economic, social, and environmental. These goals provide a valuable roadmap for formulating global policies.

These Sustainable Development Goals allow for a global commitment to continuous economic growth and achieving targets set over the past two decades. All these goals directly influence national legal norms and programs to achieve the stipulated targets.

In this context, regarding the energy sector, Sustainable Development Goal number 7 is defined as “Ensuring access to affordable, reliable, sustainable, and modern energy for all.” Therefore, all member countries of the United Nations must create an action plan to achieve and implement this sustainable development goal.

In Nicaragua, the Ministry of Energy and Mines is responsible for the indicative planning of the electricity sector. Its goal is to lead the optimal use and development of energy resources while considering the environment.

    • Demand Growth in Nicaragua

According to official sources from the Ministry of Energy and Mines, in 2018, the National Electric Transmission Company (ENATREL), in conjunction with the aforementioned Ministry, reported that over the past 12 years (2006-2017), the power demand grew at an average rate of 3.23%, while energy consumption grew by 3.70%. In 2017, the maximum demand was recorded at 709.05 MW and 4,379.18 GWh. The installed electric generation capacity doubled from 2007 to 2020, increasing from 768.0 MW to 1,619.7 MW.

The national electricity coverage index rose from 54% in 2006 to 98.5% in 2020. By the end of 2020, approximately 6.4 million Nicaraguans had access to electricity. Additionally, the share of electricity generated from renewable resources increased from 26% in 2006 to 75.94% in 2020.

The work plan for the period 2022-2026 includes a special section focused on actions for secure, sustainable, and modern energy in compliance with the sustainable development goals. It emphasizes the transition to energy generation through renewable resources. In 2017, 56% of energy generation was reported from renewable sources, with 10.4% from hydroelectric, 16.8% from geothermal, 14.2% from wind, 14.9% from biomass, and 0.3% from solar energy.

    • Plan 2022-2026

Due to generation and demand growth, Nicaragua has developed an action plan aimed at strengthening and transforming the national electricity generation matrix with renewable sources, targeting 64.22% by 2026. In 2021, 59.88% of generation came from renewable sources.

The plan also includes the execution of projects to expand access to electricity for people and families, aiming for 99.9% national electricity coverage by 2026.

Additionally, the plan involves managing the installed generation and reserve capacity to ensure the quality and security of the National Interconnected System. This includes installing 637 new megawatts of nominal capacity and 905 MVA of transformation capacity (530 MVA in new substations and 375 MVA in expanded substations).

    • Incentives

Currently, significant changes have emerged in our legislation concerning the promotion of energy generation through renewable sources. In December 2023, the Reform to the Law for the Promotion of Electric Generation with Renewable Sources was approved, extending the fiscal benefits for clean energy generation projects until 2028.

These fiscal incentives include exemptions from import duties on machinery and equipment for reinvestment and construction activities. Additionally, there are exemptions from value-added tax on machinery and equipment, income tax exemptions, and other incentives that promote this type of investment.

It is worth noting that, in addition to energy generation, potential sectors related to this field are recognized for exploring business opportunities. According to current regulations, energy commercialization, distributed generation, electric vehicles, and charging infrastructure are feasible.