{"id":179677,"date":"2025-12-08T07:28:03","date_gmt":"2025-12-08T13:28:03","guid":{"rendered":"https:\/\/confidencial.digital\/sin-categoria\/the-trap-of-chinese-solidarity-nicaragua-will-pay-2-billion-usd-for-costly-loans\/"},"modified":"2025-12-14T01:41:01","modified_gmt":"2025-12-14T07:41:01","slug":"the-trap-of-chinese-solidarity-nicaragua-will-pay-2-billion-usd-for-costly-loans","status":"publish","type":"post","link":"https:\/\/confidencial.digital\/en\/nation\/the-trap-of-chinese-solidarity-nicaragua-will-pay-2-billion-usd-for-costly-loans\/","title":{"rendered":"The Trap of Chinese \u201cSolidarity\u201d: Nicaragua Will Pay 2 Billion USD for Costly Loans"},"content":{"rendered":"\n

\u201cLong live the solidarity and cooperation of the People\u2019s Republic of China!\u201d shouted dictator Daniel Ortega, while dozens of soldiers and civilians responded: \u201cLong live! Long live!\u201d The cheer stands in stark contrast to the reality: China has given little or nothing compared to what it will take from Nicaraguans \u2014 more than two billion dollars in exchange for loans under onerous conditions. <\/strong> <\/p>\n\n

Ortega\u2019s exaltation took place on Tuesday, July 29, 2025, during the ceremony marking the 46th anniversary of the Air Force. The president also said that Nicaragua is a \u201cnation blessed by God\u201d because it counts China and Russia among its allies. However, neither of these \u201callies\u201d appears on the list of Nicaragua\u2019s main donors, although China does appear among the lenders. <\/p>\n\n

Between 2023 and 2025, Nicaragua signed eleven loan agreements with Chinese companies, totaling more than USD 1.437 billion in principal. But far from being a source of favorable financing, these agreements impose on the country \u201can onerous burden\u201d through high interest rates and hefty commissions.<\/p><\/blockquote><\/figure>\n\n

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million is the total principal of the eleven loans Nicaragua signed with Chinese companies between 2023 and 2025<\/p><\/div><\/div><\/div><\/div>\n<\/div><\/div><\/div><\/div>\n\n\n\n

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+2048<\/span><\/h4>

million is what Nicaragua will pay China due to high interest rates and commissions on these loans.<\/p><\/div><\/div><\/div><\/div>\n<\/div><\/div><\/div><\/div>\n<\/div><\/div><\/div><\/div><\/div>\n\n

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The final amount Nicaragua will repay to China is around USD 2.0486 billion, according to an analysis by political scientist and exiled former political prisoner F\u00e9lix Maradiaga, prepared for CONFIDENCIAL<\/strong>.<\/p>\n\n

The detailed analysis of the loans indicates that the cost of this debt \u201cis high both financially and strategically.\u201d The agreed interest rates range from 4% to 6%, with relatively short terms and initial commissions that range from 2% to as high as 3.5% of the principal. <\/p>\n\n

Typical fees include: an initial fee (1.3% to 3.5% of the amount), an opening fee (0.5%), a commitment fee (0.6% to 0.7% annually on undisbursed funds), and annual agency fees of nearly USD 100,000.<\/p>\n\n

\"Laureano
Laureano Ortega Murillo, son of the presidential couple, speaks at an event organized by the Chinese Embassy in Nicaragua in February 2024. Photo: CCC <\/figcaption><\/figure>\n\n
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China\u2019s Loans: The Most Expensive on the International Market<\/strong><\/h2>\n\n

China\u2019s interest rates and commissions stand in stark contrast to the concessional financing traditionally offered by multilateral organizations such as the World Bank, the International Monetary Fund (IMF), or the Inter-American Development Bank (IDB), with rates close to 1% and terms of up to 40 years.<\/p>\n\n

Every dollar borrowed from China means Nicaragua must pay between 20% and 50% extra in interest and commissions.<\/p><\/blockquote><\/figure>\n\n

\u201cChina has become Nicaragua\u2019s lender of last resort, imposing tough financial conditions that reflect the country\u2019s risk level and the Ortega regime\u2019s lack of financing alternatives,\u201d argues the Nicaraguan political scientist and academic, who is currently a professor of Political Science at the University of Virginia in the United States.<\/p>\n\n

The most illustrative case is the Punta Huete airport, whose total cost \u2014 debt plus local counterpart \u2014 approaches USD 800 million, nearly double the originally announced base cost of USD 440 million.<\/p>\n\n

The same occurs with Phase II of the Coastal Highway and the expansion of the \u201cJulia Herrera de Pomares\u201d logistics center near the Port of Corinto in Chinandega.<\/p>\n\n

In both projects, interests and fees inflate the bill by more than USD 100 million. Even the smaller loans, such as the one for the National Emergency System (Sinarem), end up costing 30% more than the amount actually received. <\/p>\n\n

\"First
View of the first 30-kilometer section of the Coastal Highway, inaugurated in mid-November 2025. \/\/ Photo: CCC <\/figcaption><\/figure>\n\n
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Chinese Money Didn\u2019t Appear Until Mid-2025<\/strong><\/h2>\n\n

The Ortega regime\u2019s odes to China\u2019s \u201csolidarity\u201d and \u201ccooperation\u201d are not backed by official statistics, which show that \u2014between 2023 and September 2025\u2014 about 6.99 billion c\u00f3rdobas (around 191 million dollars) were disbursed for six of the eleven contracted projects.<\/p>\n\n

Of the 6.99 billion disbursed, only 7.4% \u2014about 522.6 million c\u00f3rdobas (more than 14.2 million dollars)\u2014 came from \u201cexternal loans.\u201d The rest \u2014around 6.47 billion c\u00f3rdobas (more than 176 million dollars)\u2014 came from state accounts, according to the budget execution reports for 2023, 2024, and up to September 2025 prepared by the Ministry of Finance and Public Credit.<\/p><\/blockquote><\/figure>\n\n

The Punta Huete airport project and the National Emergency System (Sinarem) are the only ones that have received Chinese funds. Both projects are being carried out by the Chinese company CAMC Engineering Co., Ltd. (CAMCE).<\/p>\n\n

Chinese disbursements for both projects occurred only after the first half of 2025, according to the Budget Execution Report for January\u2013September 2025.<\/p>\n\n

For the Punta Huete project, about 485.96 million c\u00f3rdobas (around 13.2 million dollars) were recorded as \u201cexternal loans.\u201d Meanwhile, Sinarem received about 36.7 million c\u00f3rdobas (just over one million dollars), according to official figures. <\/p>\n\n

CAMCE is also building three Liquefied Petroleum Gas (LPG) storage spheres in Miramar, Le\u00f3n. However, no disbursements have been made for this project. <\/p>\n\n

The company China Communications Construction Company (CCCC), which is in charge of five Nicaraguan projects (solar plants and wind farms), has not delivered a single c\u00f3rdoba between 2023 and 2025. For 2025, it had promised about 1,017.7 million c\u00f3rdobas (around 27.7 million dollars), but up until September it had not made any disbursement. <\/p>\n\n

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Chinese Companies Receive Their Payments and Advances from Nicaragua on Time<\/strong><\/h2>\n\n

The meager Chinese funds stand in stark contrast to the punctual payments Nicaragua makes to the companies CAMCE and CCCC. Between 2024 and 2025, the Government has paid both companies more than 2.348 billion c\u00f3rdobas (about 64.11 million dollars), according to budget execution reports. <\/p>\n\n

In 2024, the Ortega regime paid China CAMC Engineering about 574.41 million c\u00f3rdobas (around 15.6 million dollars) in \u201ccommissions,\u201d while CCCC received 82.48 million c\u00f3rdobas (about 2.2 million dollars) for the same concept.<\/p><\/blockquote><\/figure>\n\n

The 2024 Execution Report details that the state-owned Nicaraguan Gas Company (Enigas) was assigned an extra 243.8 million c\u00f3rdobas to pay the Chinese company CAMCE a 20% advance on the \u201ccontract\u201d to build the three LPG storage spheres. Despite already receiving this payment, the company has not made any disbursement for the project. <\/p>\n\n

In 2025, CAMCE has already received about 12.39 million c\u00f3rdobas (around 338,579 dollars) in \u201cinterest\u201d payments, and an additional 1.0962 billion c\u00f3rdobas (about 29.9 million dollars) in \u201ccommissions,\u201d according to official data.<\/p>\n\n

The company CCCC has already been paid about 35.7 million c\u00f3rdobas (more than 976,000 dollars) in \u201cinterest,\u201d and 546.7 million c\u00f3rdobas (more than 14.9 million dollars) in \u201ccommissions,\u201d according to the January\u2013September 2025 Budget Execution Report.<\/p>\n\n

The official document indicates that CCCC still has a pending \u201camortization\u201d payment of 310.6 million c\u00f3rdobas (more than 8.4 million dollars). This amount is budgeted but has not yet been executed. <\/p>\n\n

\"Daniel
Daniel Ortega greets China\u2019s new ambassador to Nicaragua, Qu Yuhui, on November 8, 2025, in Managua. \/\/ Photo: CCC <\/figcaption><\/figure>\n\n
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Is It Necessary to Go Into Debt with China?<\/strong><\/h2>\n\n

Argentine analyst Hern\u00e1n Alberro, a specialist in International Relations, argues that it is not necessary to take on debt in order to maintain a good relationship with China. However, in the case of small, developing countries like Nicaragua, China uses lending \u201cdiscursively to claim it is providing development assistance.\u201d<\/p>\n\n

He emphasizes that in Nicaragua\u2019s case, China\u2019s influence is practically \u201czero,\u201d because China does not need to do anything for Nicaragua to align itself with its interests. <\/p>\n\n

On the political and strategic front, the relationship with China has deepened quickly. Immediately after diplomatic relations were restored in December 2021, a friendship association between the Nicaraguan and Chinese parliaments was established, sister-city agreements were created, and trips by officials from both countries multiplied. Alberro notes this in his analysis for the China Index 2024,<\/a> an annual study that measures the level of Chinese penetration around the world. Evan Ellis, a researcher in Latin American Studies at the U.S. Army War College\u2019s Strategic Studies Institute, argues that for Chinese companies, the key issue is ensuring their investment gets paid back. <\/p>\n\n

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Evan Ellis<\/p>

U.S. researcher<\/p><\/div><\/div>

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\u201cIf they are certain they\u2019ll get paid, the Chinese will build anything \u2014 a wall in the middle of the desert. Whether this creates value in the country or not is not their concern.\u201d <\/p><\/div><\/div><\/div><\/div><\/div>\n\n

Maradiaga\u2019s analysis highlights one of the most \u201calarming\u201d conditions: the mandatory 20% advance payment on the contractual value of each project \u2014 a payment the Nicaraguan government must deliver even before the Chinese company begins mobilizing equipment. He describes this as an \u201cexceptional\u201d and \u201chighly unusual\u201d requirement.<\/p>\n\n

In this setup, the commercial viability of the projects becomes the responsibility of the partner \u2014 in this case, Nicaragua. Ellis points out that in the case of the Punta Huete airport, the investment is \u201cdifficult\u201d to justify commercially, especially at a time when Nicaragua is becoming more isolated and facing weak demand for international tourism. <\/p>\n\n