Brazilian funding for the 253-MW Tumarin hydroelectric plant in Nicaragua has been suspended while a federal authorities continue investigating allegations of graft, according to state news service Agencia Brasil.
The decision, made by Brazilian federal audit court Tribunal de Contas da Uniao last week, was made due to “irregularities” concerning US$100 million committed by the Brazilian government for the project.
The accusations come as Brazil’s federal police continue their “Lava Jato” corruption probe, which comes as the South American company looks to recover from growing economic and political crisis.
Specifically named in the investigation are construction firm Queiroz Galvao and state-owned utility Eletrobras — each of which as been given 15 days to respond to allegations made in the report.
The two Brazilian companies make up the consortium developing the company, Centrales Hidroelectricas de Nicaragua (CHN), alongside Nicaraguan state-owned power generator Enel.
The investigation is only the latest blow to the project’s development.
HydroWorld.com reported in April that work on the plant had been suspended indefinitely after Queiroz Galvao announced its Nicaragua for economic reasons.
CHN began initial works on the plant in March 2011, at which point the project was projected to begin operating in early 2015.
However, HydroWorld reported in January 2014 that the official groundbreaking on the plant had been postponed at least until the end of that year.
Tumarin is reported to cost more than $1 billion, with financing coming from Eletrobras under a 2008 build-operate-transfer contract that will lasted up to 30 years. The project is located on the Rio Grande de Matagalpa near Apawas.
For more news from Latin America, visit here.