Nicaragua’s National Assembly approves $400M loan from China to build an airport

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By LatAm Reports Editor

Daniel Ortega’s regime ordered the National Assembly on Friday to approve a decree of loan hiring with China for almost 400 million dollars, to promote the reconstruction and modernization of Punta Huete International Airport, which will be executed by the Ministry of Transport and Infrastructure (MTI).

Despite the size of the loan, the Ortega regime ordered the deputies to approve it with urgent procedure, a condition that speeds up the process and avoids any possibility of analysis by the legislature. The credit was approved this Friday without objection by the deputies, all allies of the dictatorship.

The loan is divided into two tranches. The first is for 1,438 million yuan (equivalent to about $200 million), which will be provided by China CAMC Engineering. A second tranche is for 1.436 million yuan (equivalent to about $200 million).

The Ministry of Finance and Public Credit, which appears as a counterpart to the agreement, pledged to pay 20 percent in advance of this loan and the remaining will be provided by the Beijing-based Chinese company and represented by Yan HaiLu. This company, in addition to providing a part of the credit, will be in charge of designing and executing the work, which is 52 kilometers from Managua.

The loan agreement leaves the Chinese company well armored, not the State, as it provides that the credit in general will be paid within 15 years, will have 4.5 years of grace (equivalent to 54 months), with an interest rate of 5.2 percent.

In addition, the State will have to pay an initial commission of 1.3 percent over the amount, 0.7 percent commitment, another 0.5 percent for opening the credit and 1 percent for management. The Ortega regime ensures that the conditions of the credit comply with the state’s debt guidelines.

Although there is no date when the project will be implemented or the period of development of the work, the regime says it expects the new airport to serve as transit for 3.5 million national and international passengers, above the 1.3 million that was recorded in 2023 at the current Augusto C International Airport. Sandino, from Managua.

According to the aspirations of the Government, which once promised a canal work that was never realized, if the airport is built, it will have an annual load movement yield of 35,000 tons, and will be able to receive maximum capacity aircraft.

It also hopes that it could have direct flights from Iran, China, Russia, Cuba, Canada, Europe and Venezuela; it would have 20 routes. The regime also trusts that the cost of air transport in Nicaragua will be cheap.

It is expected that the work will be carried out in 48 months and it will start 90 days after the construction order of the project is given, reads in the document. In order to start the project, the regime will have to give the Chinese company an advance of 20 percent of the amount agreed in both tranches, which would be around $80 million in both tranches.

The first disbursement must occur within 12 months, otherwise the credit agreement will be left without legal value unless the Ortega regime and the Chinese company hold talks.

The 48-month period provides for 8 months for the design of the work and 40 months to execute and complete it.

This article has been translated from the original which first appeared in La Prensa NI