Nicaragua’s energy sector is facing one of the most important challenges of its history in terms energy infrastructure development and electricity access. As a result of substantial investments in grid extension and strengthening of distribution and transmission systems, official figures indicate that electrification rates increased from 47 percent in 2002 to 80 percent in 2014. However, the cost of grid extension has had consequences for electricity prices, and Nicaragua is the country with the highest average retail price per unit of electricity in Central America.
Nicaragua faces important challenges that probably will take time to overcome, however the experience of key frontline workers offers a holistic view of those challenges and provides valuable information to help find new opportunities. This policy brief summarises the conclusions and recommendations arising from a workshop held in Matagalpa, Nicaragua in April 2017. With the support of Nicaraguan experts, the event explored the main barriers to increasing electrification rates. The aim of the workshop was to understand the role of microfinancing and energy policies, and how both can facilitate access to electricity for the rural population of Nicaragua. Key findings and recommendations for policymakers, development organisations, and other relevant stakeholders interested in energy access matters are summarised here.