The Energy Transition in Nicaragua

Nicaragua’s energy transition has gained regional recognition for its high share of renewable energy in electricity generation, driven by strong political will to reduce fossil fuel dependence and improve energy security. Over 60% of the country’s electricity is produced from renewable sources, including geothermal, hydropower, wind, solar PV, and biomass. The National Energy Policy and Electricity Industry Law (Ley de la Industria Eléctrica) guide energy planning, investment, and diversification, with targets to further expand renewables and promote rural electrification. Geothermal energy, particularly from the Momotombo and San Jacinto-Tizate fields, forms a core component of Nicaragua’s baseload power strategy, providing stable and low-emission energy. Although Nicaragua has an active mining sector, primarily producing gold and silver, it does not produce lithium, cobalt, nickel, or rare earth elements, relying instead on imports for these critical minerals required for renewable technologies and battery storage systems. Key challenges include political instability, social conflicts around large hydropower and mining projects, and vulnerability to climate-related disasters. Nevertheless, Nicaragua’s abundant renewable resources, geothermal leadership, and regional interconnection via SIEPAC offer a strong platform to advance its energy transition, enhance energy resilience, and support sustainable development.