“Post expansion, the project will represent about 8% of Nicaragua’s total installed capacity.”
PENSA is a subsidiary of Ram Power Corporation, which was formed by the merger between Polaris Geothermal of Canada, Ram Power and Western GeoPower.
The concession has the potential to produce more than 200MW of power. It currently houses a 10MW power plant which was commissioned in March 2005. The existing plant is being expanded by 72MW and is scheduled to become fully operational in December 2012.
The expansion programme is being carried out in two phases. The total cost of the project including phases I and II is $309m.
Post expansion, the project will represent about 8% of Nicaragua’s total installed capacity. Power produced from the new turbines will be supplied to Disnorte and Dissur under a long term power purchase agreement (PPA) ending in 2029. The two companies are the subsidiaries of Spanish utility firm Union Fenosa.
Geothermal project details
The project involves the installation of two 36MW flash turbines and a 10MW bottoming unit. Upon completion, the total capacity of the project will be 82MW.
The existing 10MW plant comprises two 5MW back pressure turbines. These turbines will be decommissioned after the new turbines are commissioned.
Phase I construction works commenced in December 2009 and were completed in October 2011. The first phase is currently under commissioning and is expected to become operational in December 2011. The capacity of the existing power plant will increase to 46MW once phase 1 becomes operational.
Phase II involves drilling of additional production wells and building of steam infrastructure. Construction works began in August 2011 to increase the total capacity of the plant to 72MW. Phase II will be commissioned in December 2012.
Development and expansion phases
The combined environmental impact assessment (EIA) for phases I and II was approved by the Ministry of Environmental and Natural Resources in 2008.
The phase II expansion required drilling of two injection and production wells to a depth of 2,500m.
As of March 2010, 56MW of production wells and two new tested wells of 16MW and 22.8MW were available. Drilling of two additional wells, SJ 12-1 and SJ 9-3, was pending.
The drilling programme commenced in April 2010 with SJ 12-1. The original drilling had encountered some technical problems. In order to correct it, SJ 12-1was re-drilled to the original production zone. It was drilled to a depth of 8,544ft by March 2011. An injective test performed immediately confirmed the steam rate of 20t/h/bar sufficient for a 5MW to 10MW capacity.
The drilling programme continued through second quarter of 2011. The SJ 9-3 reservoir formation well was damaged during the initial drilling, resulting in limited steam production.
An acid stimulating programme was initiated in February 2011 in order to repair the damage and increase steam production. The programme was successfully completed in July 2011 resulting in a high steam rate of 57t/h, which is equivalent to a power generation capacity of 7.4MW.
Contracts awarded to international companies
The production wells were drilled by ThermaSource under a contract awarded in March 2010. A contract for mud logging was also signed during the same time with ThermaSource’s subsidiary Tecton Geoligic.
The construction contract for phases I and II of the project was awarded to the Construtora Queiroz Galvao of Brazil. Cemex is supplying building material and concrete mix to the project site on a sub-contract basis for Construtora Queiroz Galvao.
Fuji Electric of Japan is the turbine supplier. Arias & Muรฑoz was the financial consultant for Phase II financing.
Financing the San Jacinto-Tizate geothermal project
The loan proceeds were raised in two different instalments.
“San Jacinto-Tizate is one of the highest quality geothermal reserves in the world. It is in northwest Nicaragua.”
Loan proceeds worth $149.5m for phase I was contributed by a consortium of Central American Bank of Economic Integration (BCIE), The Netherland’s FMO, Export Development Canada (EDC) and the Cordiant Capital.
A $160m debt for phase II was raised by a consortium of the International Financial Corporation (IFC), the Inter-American Development Bank (IDB), Central American Bank for Economic Integration (CABEI), Deutsche Investitions- und Entwicklungsgesellschaft (DEG), Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), Oesterreichische Entwicklungsbank (OeEB) and Sociรฉtรฉ de Promotion et Participation pour la Coopรฉration Economique (PROPARCO).
Shearman & Sterling provided financial advisory services to all the consortium partners involved in the financing.
