As the Panama Canal’s historic expansion project makes headlines, another Central American country is hoping a new
shortcut between the Atlantic
and Pacific oceans will boost
its economy. Nicaragua has
been considered a potential
canal site for two centuries,
but recent foreign investment
could make that long-held
dream a reality.
The primary backer for the
canal is China’s HK Nicaragua Canal Development
Investment Co. (HKND Group), though the company says the US$50 billion project has attracted
interest from investors around the globe.
“No single type of funding on its own can cover
the cost of a project like this, nor can any single
geographical market,” says Bill Wild, chief project
adviser at HKND Group, Queensland, Australia.
Project planning began in 2012, and HKND aims
to complete the new waterway five years after the
major canal excavation begins. But the start date for
that phase has yet to be determined.
Skepticism of the market demand for such
a wide canal and a history of failed plans have
raised questions about the project’s feasibil-
ity. And despite the Nicaraguan government’s
approval of an environmental and social impact
assessment study in November 2015 that autho-
rized HKND Group to start construction, pro-
tests from stakeholders such as environmental
activists, indigenous communities and local fish-
ermen have not been quelled.
According to the impact assessment, the project
team had not sufficiently mitigated the risk that the
canal would damage the environment, including
Lake Nicaragua, the largest freshwater source in
Central America. The report warned that the largest civil engineering project in history could cause
permanent damage to marine, freshwater and terrestrial ecosystems.
However, the report also concluded that, with
A Chinese-backed infrastructure project could reshape global
shipping routes—and the Nicaraguan economy.
its own can
cover the cost
of a project
like this, nor
can any single
—Bill Wild, HKND Group,
HKND Group wants to
build a US$50 billion canal