Ready to read more about my exciting adventures abroad? When
\nI left off in my story, I was happily moving my family to Nicaragua while being
\nextorted by Nicaraguan customs and a suspicious broker. Never fear, though,
\nbecause through the grace of God and diligent investing and saving, we were in
\na great cash position. I guess governments have some sort of income radar to
\nzero in on and drain anyone who is productive, and I\u2019ll talk more on that
\nlater, but today I want to focus on the main reason we went in the first place.<\/p>\n
As I mentioned previously, Nicaragua, a third world country
\nwith a huge energy deficit, was ripe with opportunity for investment in that
\nsector. Before we moved, we had queued up several possible manufacturers to build
\nhydroelectric and wind projects, were in discussions with contacts at the local
\npower distributor for a PPA (Purchase Power Agreement, needed for financing)
\nand had previously met with the country\u2019s leaders concerning the need for more
\npower and been encouraged to build projects. We had detailed designs and had
\ndone some preliminary scouting for ideal site locations. In addition, renewable
\nenergy was being touted and given special tax incentives.<\/p>\n
Did you know that European governments will practically give
\naway money to third world countries to help develop beneficial projects such as
\nours? They only ask that standard good business practices be used to protect
\nagainst corrupt and graft. When we arrived in Nicaragua, we were blessed to run
\ninto a dear friend of ours who clued us into this and introduced us to people
\nthat could help secure a grant for our project. We, together with our friend
\nand his contacts, had a fantastic team of talented individuals ready to embark
\non exciting work that the country desperately needs. We were on (what seemed) the
\nright track to build two projects that together would have added approximately
\n80 desperately needed megawatts to the country\u2019s electrical grid in a\u00a0 $200 million investment.<\/p>\n
However, all was not to go as planned. Nicaragua unfortunately is ruled by a group\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 of Marxists (despite their slogan about being
\n\u201cChristian and Socialist\u201d), who have recently adopted crony capitalism under
\nthe guise of seeming \u201cbusiness-friendly.\u201d Elected on a shady plurality and with
\noutrageous promises to the people (another one of his party\u2019s slogans is \u201cEl
\nPueblo Presidente\u201d or \u201cThe people for President\u201d), Daniel Ortega claims to protect
\nthe poor people of the country from oppression from the bourgeois by giving
\nthem free stuff and allowing them to take over public property for personal
\nuse. He also claims that as long as the business sector stays out of politics,
\nhe will stay out of the business sector.<\/p>\n
Well. It sounds pretty but, um, it\u2019s not.<\/p>\n
You see, in an alliance with Hugo Chavez, Ortega formed a
\ncompany called \u201cAlbanisa\u201d.\u00a0 When it was
\nformed, one of the goals of Albanisa was to funnel Venezuelan oil to Nicaragua
\nat heavily discounted prices, essentially amounting to foreign aid.\u00a0 Ortega sold this concept to the people of
\nNicaragua as a boon from their friends in Venezuela and that it would help him
\nrealize his goal for providing \u201csocial programs\u201d for the people.\u00a0 The way it would work is thus: Venezuela
\nwould sell Ortega\/Albanisa a barrel of oil at a price between
\n$35-50\/barrel.\u00a0 Ortega\/Albanisa would
\nthen turn around and resell the oil at market prices, $80-110\/barrel and pocket
\nthe diff\u2026uh\u2026spend it on programs for the people.\u00a0 Not surprisingly, where the oil was supposed
\nto be given as untied aid, the exchanges were later converted after the fact to
\nnational debt.\u00a0 Ortega has mortgaged the
\nfuture of Nicaragua for Venezuelan oil. He now uses the money to buy all kinds
\nof things for himself, personally, within the country.\u00a0 Purchases include hotels, restaurants, land, and
\nothers.\u00a0 Seeing how fun capitalism can
\nbe, Ortega has recently announced that he, personally, will begin to address
\nthe country\u2019s energy problems by building all kinds of new power plants.<\/p>\n
So despite all the touting of renewable energy as the future
\nof Nicaragua, it presents a bit of a conflict of interest for a few key people
\nheavily invested in Venezuelan oil, and a huge problem for small developers
\nsuch as ourselves. Oh, there are some renewable projects being built, but with huge
\ncontributions and ownership from other Ortega-friendly governments such as Iran,
\nand despite heavy obstacles from the government regulating entities, not to
\nmention pockets being lined left and right.<\/p>\n
Per the advice of our friend and his European contacts, we
\ntried to structure our project so that we could build something together with
\nthe government and get a grant, but despite their previous \u201centhusiasm\u201d, when
\nit came time for the Nicaraguan government to commit, we began to find it
\nincreasingly difficult to get in contact with the same government officials we
\nhad spoken to before. In addition, the implication was that we would need to
\nresort to the same illegal bribing as the other projects currently under
\nconstruction (and give away the business in the process) in order to get any
\ntraction, which would have not only landed us in jail in violation of the
\nForeign Corrupt Practices Act, but it would have made us ineligible for the
\ngrant, which has very strict ethical provisions.<\/p>\n
The icing on the cake, after months of work to build the
\nproject (years if you count the preparation before we moved) and nearly
\n$100,000 of our own money invested, came with the news that the local power
\ndistributor was deep in debt, had failed to pay its energy suppliers, and was
\nnow asking for its parent company in Spain to bail it out. The Spanish company
\nrefused to do anything, and so the Nicaraguan government is considering a
\nbailout (read: nationalization.) This made the PPA worthless, and any hope of
\nfinancing (even with a grant) was now a fond memory. To make matters worse,
\nthere is speculation that this bankruptcy was encouraged by insiders in bed
\nwith the government to secure the oil interests.<\/p>\n
Our team decided that the conditions in the country were not
\nconducive to investment in energy, and we decided to move on. So much for the
\nfuture of Nicaragua, not interfering in business, and touting renewable energy.
\nThe oil company owned by Nicaragua\u2019s leader and his cronies simply could not
\nallow anything or anyone to get in the way of its Venezuelan oil deals, and so
\nthe people continue to suffer and investors are driven away.<\/p>\n
OK, you may be saying, that really sucks for Nicaragua. That\u2019s Oh\u2026wait\u2026<\/p>\n I\u2019ll leave you to chew on that until next time\u2026<\/p>\n","protected":false},"excerpt":{"rendered":" Ready to read more about my exciting adventures abroad? When I left off in my story, I was happily moving my family to Nicaragua while being extorted by Nicaraguan customs and a suspicious broker. Never fear, though, because through the … Continue reading
\nwhy it\u2019s a third world country, full of people that were easily swayed to vote
\nfor Ortega in exchange for the promise of a free ride. What does that have to
\ndo with U.S. politics? It\u2019s not like we<\/em>
\nhave a president who got elected with empty promises and is an egomaniacal dictator
\nwannabe, abusing the executive power to control the oil and energy industries
\nand other vital sectors of the economy for his own political and personal gain
\nand that of his cronies.<\/p>\n