Centrales Hidroelectricas de Nicaragua, or CHN, a company formed by Brazilian state-controlled utility Eletrobras and the Queiroz Galvao conglomerate, plans to start producing electricity in Nicaragua in the second half of 2016 via the $1.1 billion Tumarin project, CHN CEO Marcelo Conde said.

The Tumarin hydroelectric power plant will be constructed in La Cruz de Rio Grande, a city in the Atlantico Sur Autonomous Region, or RAAS, over four years, Conde said.

The power plant will have 253 MW of installed generating capacity, the executive said.

Brazil's National Social Development Bank, or BNDES, provided Nicaragua with a $342 million loan to fund Tumarin's construction.

The Central American Bank for Economic Integration, or BCIE, is providing $252 million in financing and Nicaragua is trying to obtain additional loans for the project from the Inter-American Development Bank, or IDB, and the World Bank.

Eletrobras and partner Queiroz Galvão, which is privately held, are willing to invest up to 47 percent of the project's cost, allowing Tumarin to be fully funded.

CHN has authorization from the Energy and Mines Ministry to complete preliminary construction and road expansion work for Tumarin, a renewable energy project that will change Nicaragua's power generation mix.

Plans call for construction of a dam to harness the waters of the Grande de Matagalpa River in northern Nicaragua for electricity production.

The project is expected to create about 3,000 direct jobs, cut oil imports by some $80 million annually and provide 28 percent of Nicaragua's hydroelectric energy, CHN said. EFE