AMAYO II is the extension of the existing wind energy project AMAYO I in south-western Nicaragua. The wind farm is located on the western shore of Lake Nicaragua, about 18km southeast of the city of Rivas, and guarantees favourable west-bound winds. The 11 turbines provide a capacity of 23MW and are located adjacent to the 39 MW AMAYO I wind project. AMAYO I started its operation February 2009 and due to higher wind speeds revenues since then have developed superior to expectations. The construction of AMAYO II started mid 2009 and final completion has been achieved in October 2010.

The major project sponsors are US based AEI and Centrans Energy Services Inc. from Guatemala (CENTRANS). AEI successfully acquires, develops and operates power projects. Together with CENTRANS they control power generation, transmission and distribution in a number of projects in Latin America. CENTRANS is owned by a Guatemalan family.

Electricity is being sold to the local power distribution companies DisNorte and DisSur SA, local subsidiaries of the Spanish power company Union Fenosa, on the basis of a 15 year Power Purchase Agreement (PPA).

As a genuine project finance transaction, AMAYO does not benefit from a sovereign or corporate (bank) guarantee to ensure the repayment of the debt. It is typical for infrastructure projects that the repayment term requires a long-term loan in order to achieve a socially acceptable and competitive tariff. A shorter repayment period would result in a higher tariff for the local population. In view of the substantial political risk in Nicaragua, the commercial lenders abstain from such a long-term commitment and private sponsors limit their commitment to the equity. As mainly DFIs have the opportunity to participate in a long-term financing in a high risk country, BIO will play a very important role in the financing of the project, where the focus lies on the long-term financing of the operating period rather than the construction period.

The development impact of AMAYO II lies principally in the energy substitution effect from fossil sources to CO2 free energy, with its significance for the climate change issue. The installation of wind energy reduces GHG-emissions of 67.000 tons CO2 per year. Furthermore, the structural trade deficit will be reduced by the substitution of fossil fuel imports. The performance of the publicly dominated power sector will improve significantly through the purely private operator and through the transfer of modern technology for clean energy.

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    Wind energy

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