Geothermal in Nicaragua Moves Forward

Submitted by fyl on 21 September, 2007 - 05:53.
In a Cleantech article, there is an update on Polaris Geothermal's plans on their geothermal development work in Nicaragua. They signed a deal with Iceland's Exorka International to develop and operate projects in Nicaragua.
Polaris said the planned 66 megawatt San Jacinto-Tizate geothermal project in Nicaragua is being developed in stages, providing early generation revenue from existing wells while the balance of the project is constructed.
‹ Literacy Campaign in Prisons Esso, Nicaragua, Venezuela, ... What's Right? ›
( categories: )

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

Not only Esso must ask, why invest in Nicaragua?

Submitted by Daddy-YO on 23 September, 2007 - 12:53.

I quote without comment the following, from the June 4, 2007 article in Canadian Business magazine, "Nicaraguan heat" by Zena Olijnyk:

"There are certain countries that immediately raise red flags for investors trying to assess political risk. Cuba, Venezuela, Nicaragua, Bolivia and Zimbabwe are among those nations where the potential profits from any foray by a publicly traded company must be weighed against the heightened potential that the government will work against a successful operation. Such risk can appear relatively small—like a longer-than-usual wait for an exploration permit, perhaps—or large, like the possibility the government will take over your company, through nationalization, without adequate compensation. However, whatever the case, the results of such uncertainty are often stock price volatility.

"Certainly, the case of Polaris Geothermal Inc. provides a cautionary tale of what can happen in a region with a history of political instability. ... In late February, executives were shocked to learn that the Nicaraguan attorney general’s office was reviewing Polaris’s ownership rights to its San Jacinto–Tizate concession—where Polaris is implementing a first-stage plan to produce 66 megawatts of geothermal power. On Feb. 26, the company said it was "extremely surprised by these actions," especially since it believed concession rights had previously been reviewed, and disputes resolved, by the attorney general’s office in 2004.

"That day, Polaris’s stock price, which had hit a 52-week high of $1.85 per share in early February, plummeted to as low as 70¢. . . . Vic Vallance, analyst in Toronto, said any move to revoke agreed-upon rights would have "a detrimental impact on foreign investment in the country."