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Latino Daily News

Saturday September 8, 2012

Nicaragua Inching Towards Canal Construction with Financing from Chinese Firm

Nicaragua Inching Towards Canal Construction with Financing from Chinese Firm

Photo: Nicaragua

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Nicaragua has signed a memorandum of understanding with a Chinese company on financing for a $30 billion inter-oceanic canal, a government official told Efe on Friday.

The document was signed by Nicaraguan deputy foreign minister and president of the Grand Interoceanic Canal Authority, Manuel Coronel Kautz, and the head of the HK Nicaragua Development Inversion Company, Wing Jang, the official said.

In the MOU, the Nicaraguan government authorized the Hong Kong-domiciled firm to structure and manage the financing for the project, President Daniel Ortega said in comments posted on the government Web site El 19 Digital.

Nicaragua has also sought financing for the project from Brazil, China, Russia and Venezuela.

The Nicaraguan Congress, controlled by Ortega’s allies, approved a bill on July 3 authorizing construction of the inter-oceanic canal project, a joint public/private venture in which the state will have a 51 percent stake and offer the remaining 49 percent to countries, international organizations, corporations or individuals.

Initial projections are that the canal could be partially completed by 2019, when it would have the capacity to accommodate 416 million metric tons, or 3.9 percent of global maritime cargo.

The canal construction zone also will be declared “of public use,” with owners of the affected properties to be compensated by the Nicaraguan government within a period of no more than 10 years.

Nicaragua is studying six potential routes, all of which traverse a section of Lake Nicaragua and one that would have ships navigate a portion of the San Juan River, the Nicaraguan-controlled waterway that forms the country’s border with Costa Rica.

Three Dutch companies currently are conducting pre-feasibility studies for the construction of the canal, the Nicaraguan government says.