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The National Assembly of Nicaragua officially approved a loan from China worth over $400 million to finance the transformation of the former military airport in Punta Huete, located in the municipality of San Francisco Libre, into an International Airport.
The loan was approved on February 9 despite being signed in December 2023 and includes two credits for the Project for the Reconstruction, Expansion, and Modernization of the International Airport of Punta Huete in Nicaragua. The first, known as the Credit Facility Agreement for Tranche AC, amounts to over 1,438 million yuan (approximately $200 million dollars). While the second, called the Credit Facility Agreement for Tranche B, consists of an additional credit of 1,436 million yuan, another $200 million dollars. These loans have a repayment period of 15 years, a grace period of 4.5 years, and an interest rate of 5.2%, with additional fees.
The execution of the project will be carried out by the company China Camc Engineering Co. Ltd. (CAMCE). Nicaragua’s Ministry of Finance and Public Credit will manage the resources, while the Ministry of Transportation and Infrastructure will oversee the airport renovations.
The project’s objective is to transform the former military airport, built in the 1980s, into a modern facility with a runway and taxiway of 3,600 meters in length and 60 meters in width. The aim is to increase air cargo capacity and accommodate over 3.5 million passengers annually.
This new debt adds to previous agreements between Nicaragua and China, addressing projects such as solar power plants and infrastructure development. As of February 2024, Nicaragua’s total external debt stands at $14.787 billion, representing 94.4% of the country’s Gross Domestic Product. This debt has sparked debates over Nicaragua’s capacity to manage its financial obligations and the effectiveness of projects supported by Chinese loans.
The project, involving the reconstruction, expansion, and modernization of the airport, aims to serve 3.5 million passengers annually and reduce layovers between Nicaragua and international destinations. The modernization of Punta Huete is expected not only to benefit the aviation sector but also to establish a multimodal logistics hub by linking with strategic projects such as the construction of the railway, the new deep-water port in Bluefields, and the installation of logistical and service industrial zones.
The National Assembly emphasized that this initiative seeks to align Nicaragua with other Central American countries that have multiple international airports.