Category: Central America

Polaris Energy Nicaragua, a subsidiary of Canadian renewable energy producer Polaris Geothermal, has announced that the office of Nicaragua’s Attorney General has informed it that it has annulled the assignment of the San Jacinto-Tizate geothermal concession awarded in 1999. Polaris announced that although the government has not decided to annul its interests in the concession, it does intend to review its right of ownership, “which may include seeking the annulment of such rights”. Polaris said it was “extremely surprised” by the recent events as it believed the assignment of the concession had been investigated fully and cleared three years ago by the Office under the previous administration. Daniel Ortega’s Sandinista government recently announced it would review all geothermal concessions.

Ratings agency Fitch has released comments on the absorption of Guatemala’s Banco de Comercio (Bancomer) by Banco Industrial, announced on January 13. On January 12, Guatemala’s banking regulator ordered the suspension of activities of small-sized local bank Bancomer. Fitch Ratings said it is maintaining its current ratings on Banco Industrial but that: “Bancomer could potentially impact BI’s asset quality and earnings over time, as Bancomer’s asset quality is relatively worse than BI’s figures.” Banco Industrial currently carries a long-term foreign and local currency issuer default rating (IDR) of BB.

Venezuela’s president, Hugo Chávez, has announced that Venezuela is to build an oil refinery in Nicaragua. The announcement came after the Central American nation joined the ALBA (Alternativa Bolivariana para las Américas) trade agreement. The new facility will have a capacity of between 100,000 and 150,000 barrels of oil, said the president speaking in the capital Managua, telling Nicaragua it could stop worrying about its fuel problems. The country has seen a growing energy crisis since last year and a mounting number of power outages.

Guatemala has suspended the operations of Banco de Comercio, after it overextended its loan portfolio and asked the Central Bank to intervene, according to a report by Reuters. It will be the second bank to go under in the country in the past few months. Apparently, Guatemala’s banking superintendent insisted the problems did not affect the rest of the banking system and were confined to Banco de Comercio. In September the country’s fourth-largest bank, Bancafe, collapsed because of liquidity problems.

Sandinista leader and former Marxist guerrilla Daniel Ortega is back in power in Nicaragua 17 years after he was last in charge. Ortega, who was inaugurated on Wednesday, won a convincing victory in elections last November to get a second shot at running the Central American nation. He is taking over a very different country to the one he last managed in the 1980s and his supporters say his management of the economy this time around will also be very different. He has pledged to tackle energy problems and speed up economic growth as his priorities. With the very high-profile support on offer from Venezuela’s Hugo Chávez, and with a difficult political history with the US, it will be interesting to see how Ortega handles relations with his country’s largest trade partner and biggest foreign investor.

Nicaragua recorded inflation of 6.91% during the first 10 months of the year, according to figures offered by the country’s Central Bank. This compares with 9.51% for the same period last year. In the 12 months through October inflation fell to 6.98%, down 3.53 percentage points against the same period in 2005. The Central Bank is forecasting annual inflation this year of 9.1%.

Nicaraguan conservative presidential candidate Eduardo Montealegre has conceded defeat in Sunday’s elections, confirming the win by Sandinista leader Daniel Ortega. With almost all the votes now counted, Ortega won 38% of ballots cast against 29% for Montealegre. Meanwhile, Ortega has said he is in favor of constitutional reforms that will see presidential powers reduced. “There will be no dramatic or radical changes to the economic foundations that have been laid over these years”, the former Marxist guerrilla said on a visit with outgoing president Enrique Bolaños, according to Nicaraguan daily La Prensa.

With just over 40% of the votes counted, Sandinista leader Daniel Ortega looks set to win Nicaragua’s elections and return to power after 16 years. Ortega had polled just over the 40% needed (or 35% with a 5 percentage-point lead) for outright victory against 32.7% won by nearest rival, conservative Eduardo Montealegre. Ortega, who led Nicaragua between 1985 and 1990, says he is a changed man who will use this “new opportunity” to create a government of “reconciliation and national unity.” A win by Ortega will be a blow to the US administration which has openly opposed the former Marxist guerrilla in favor of Harvard-educated Montealegre, seen as the business community’s choice.

Sandinista leader Daniel Ortega is hoping to be fourth time lucky and be elected by his fellow Nicaraguans in Sunday’s elections. The former Marxist guerrilla, who led the country between 1985 and 1990, has tried – unsuccessfully – to be re-elected no fewer than three times since then. Ortega was the favorite to beat off nearest rival, Harvard-educated Eduardo Montealegre, going into election day, yesterday, although polls have been notoriously wrong in the past. Any outright winner must win 40% of the votes or 35% with a 5 percentage-point lead over the nearest rival. If not, a second-round run-off is needed; something experts say would almost certainly mean the end of Ortega’s presidential bid. Outgoing president, Enrique Bolaños, has called for calm from all parties should a further round of voting be necessary.