Nicaragua

Nicaragua's PPP framework is governed by Law No. 935 (2016) and its implementing regulations (2017), which establish procedures for project selection, procurement, risk allocation and contract management.^1,2 The Ministry of Finance and Public Credit, through its General Directorate of Public Investment (DGIP), oversees the framework and evaluates proposed projects. However, dedicated PPP staffing and operational capacity remain limited. The Public Procurement Law (2025) modernized general procurement rules while preserving separate arrangements for concessions governed by special legislation.³ Despite an established regulatory foundation, Nicaragua has made little progress on developing the institutional capacity and project preparation mechanisms needed to implement PPPs.

Nicaragua's PPP market remains largely inactive, with no new PPP projects identified as reaching financial close in recent years. Infrastructure investment has nevertheless continued, supported by public spending, foreign financing and some private participation through sector-specific arrangements outside the general PPP framework. These developments have not translated into a revival of the country's PPP market. Separately, Law No. 1203 (2024) repealed the previous interoceanic canal concession agreement and its enabling legislation, while retaining the legal framework for potential canal development.⁴ Despite the continued need for infrastructure investment, there is little evidence of a pipeline of new PPP projects advancing toward procurement or financial close.

Political support for PPPs remains weak, with no sustained government agenda or evidence of broader multiparty support. Vocal opposition to PPPs has not been identified, although restrictions on political opposition and civil society limit the significance of this finding.⁵ Constitutional reforms adopted in 2025 removed the previous explicit reference to promoting legislation for public-private infrastructure projects, replacing it with broader language supporting domestic and foreign investment.⁶ The Constitution continues to permit private investment and operating concessions in public services and infrastructure, while designating road, port and airport infrastructure as state property.⁷ Despite continued government interest in infrastructure investment and foreign financing, these developments suggest limited political momentum for PPPs rather than outright opposition.

Nicaragua performs near the regional average in regulations and institutions, with particularly strong provisions governing contract disputes, variations and oversight of contractual changes. It ranks above average for fairness and openness of contract changes, although these protections remain largely untested in practice. The country also has relatively extensive requirements for environmental risk analysis and disaster preparedness across major infrastructure sectors. However, weaknesses elsewhere in environmental and social sustainability and disaster risk management limit its overall performance in these areas.

Nicaragua faces significant challenges in translating its PPP framework into functioning institutions and projects. Political support ranks 25th regionally, while limited dedicated staffing and technical capacity constrain institutional readiness. Project preparation is another major weakness, with inadequate preparation facilities, limited technical support and shortcomings in land administration. These weaknesses contribute to Nicaragua's poor performance in project preparation and sustainability, which trails the regional average considerably, and help explain the country's limited track record of PPP implementation.

Nicaragua's overall score has remained virtually unchanged since the previous assessment, reflecting limited progress on strengthening its PPP framework or developing an active market. Financing conditions have improved modestly, including a reduction in the cost of capital, although overall financing performance remains below the regional average. Meanwhile, institutional and political risk has deteriorated, reinforcing persistent challenges to private investment. Recent changes to procurement and environmental regulations have not substantially altered Nicaragua's PPP-specific institutional arrangements or translated into renewed PPP activity.