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Clean energy investment.

CLEAN ENERGY INVESTMENT. In Central America, Nicaragua and Panama offer the best support policies, and the best conditions for investments in clean energy, among other advantages, reports the Inter-American Development Bank (March 19, 2012):

Climatescope 2012 is a report and index that assesses the investment climate for climate-related investment in Latin America and the Caribbean. It profiles 26 countries in the region and evaluates their ability to attract capital for low-carbon energy sources while building a greener economy. All countries profiled are borrowing members of the Inter-American Development Bank (IDB). Nicaragua placed second among 26 countries with an overall Climatescope score of 2.15. It performed well on indicators with strong weighting: clean energy policies, power sector structure, total clean energy investments, and availability of green microfinance. From 2006 to 2011, cumulative clean energy investment in the country totaled $1.1 billion;

Last year alone, around $211 million went to Nicaragua's wind and geothermal sectors. It has the region's most developed green microfinance sector with a total of 10 organizations providing 3,511 low-income borrowers with some kind of green financial product. Biomass and waste is Nicaragua's flagship clean energy sector with 122MW of installed capacity. In 2010, the sector accounted for 36% of total electricity generation (1,080GWh). However, it is the favorable geothermal potential which positions the country well to develop more clean energy capacity in coming years. Since 2009, this promising sector has been taking the lion's share of clean energy investment, reaching a cumulative total of $563 million in 2011;

With a Climatescope score of 2.05, Panama placed 3rd among 26 nations. Its performance is largely due to its enabling framework and substantial efforts aimed at managing greenhouse gas emissions. Its liberalized power market has attracted investments in new clean energy generation and the country has posted exceptionally high growth rates in this area. Still, the country's overall ranking was hurt by its relatively low score on clean energy investments and finance, which was assessed based on its importance relative to the overall economy. Panama also lags behind other Central American nations in green microfinance activity. In absolute terms, investments in clean energy picked up starting from 2007, reaching $1.08 billion in 2011, mostly for small hydro projects. In the short term, small hydro will continue to be Panama's flagship renewable source, but once the country's reverse auctions for clean energy gain traction wind capacity additions will follow.
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Title Annotation:THE REGION
Publication:Caribbean Update
Geographic Code:2NICA
Date:Apr 26, 2012
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