Business in the energy sector has always been among the most attractive in Nicaragua. The State grants a 15-year concession, solicits investment, and signs a contract to purchase the production at a fixed price over that period. Four investors were aiming to acquire the Momotombo geothermal plant in 2013, when the outgoing concessionaire, the Israeli company Ormat Holding, had less than a year left until the expiration of the concession granted in 1999, which was renewable in 2014.
It didn’t seem like a bad idea to try to replace them. Mexican millionaires Arturo Gamboa Rullán, Pablo Monroy Cazorla, and Guatemalan Fernando Paiz Andrade had an advantage over the Israelis: a Nicaraguan partner with influence in the inner circle of Daniel Ortega’s dictatorship. Álvaro Baltodano Monroy, son of retired Brigadier General Álvaro Baltodano Cantarero, was one of the dictatorship’s main economic operators.
The retired military officer, currently in prison with his son, accused by the dictatorship of alleged money laundering, at that time served as a link between the interests of the executive branch and the economic elite to which his family belonged. But to secure the geothermal energy business, his son’s partners needed to buy out the Israeli consortium Ormat Holding, which had operated the concession since 1999.
Trust in their favor
Trust between them was another factor that favored their interests. Baltodano Monroy is Pablo Monroy’s nephew. Monroy, in turn, founded Genomma Lab with Gamboa Rullán and other investors, a pharmaceutical products marketing company founded in 1996 and expanding to several Latin American countries.
Fernando Paiz is a prestigious Central American investor and owner of the Hyatt hotel franchise in the region. He is familiar with the situation in Nicaragua because he arrived in the country in 1974 and began successfully growing mangoes in 1990.
The loan to purchase the concession
Gamboa Rullán financed the purchase transaction. He loaned $8.6 million on May 30, 2013, to acquire the business from Ormat. According to a report prepared by PricewaterhouseCoopers’ Tel Aviv office, the company was in good financial condition.
The Momotombo geothermal plant generates between 20 and 25 MW, but has an installed capacity of 77 MW, according to the state-owned Nicaraguan Electricity Company (Enel), the institution with which the contract officially known as the «participatory partnership agreement» was signed.
The purchase amid a very favorable environment.
On February 22, 2014, Ormat Holding Corp. announced the sale of its shares for $7.5 million to a «private group with investments in the national energy sector.» The names of the buyers were not mentioned.
According to the agreement with Gamboa Rullán, the $8.6 million loan was broken down as follows: $7.45 million for the purchase of shares and $1.15 million for «working capital.» LA PRENSA emailed Gamboa Rullán on Tuesday, September 2, to discuss the matter, but he had not responded at the time of publication.
The launch of the company by its new owners occurred while the regime promised to boost the sector by 2020 with investments in geothermal energy totaling $638 million. The legal framework could not have been more generous, establishing exemptions from customs duties, VAT on machinery, and municipal taxes.
In 2016, Fernando Paiz—one of Baltodano Monroy’s partners in the Momotombo geothermal plant—was selected as Businessman of the Year by the country’s main employers’ association, the Superior Council of Private Enterprise (COSEP). In his speech, he emphasized the security he felt in Nicaragua. «I feel safer in Nicaragua than at home,» he told pro-government media.
Were the Israelis forced to sell?
Although Ormat’s 15-year concession was expiring in a few months, according to the financial statements as of December 31, 2012, prepared by an Israeli office of Pricewaterhousecoopers, they do not indicate a need to sell.
Ormat’s financial statement became public knowledge through the Pandora Papers leak, obtained by the German newspaper Süddeutsche Zeitung and shared with the International Consortium of Investigative Journalists (ICIJ).
A review of these figures supports the theory that the Israelis were forced to sell, which is the belief of one specialist who, when contacted and requested anonymity for fear of reprisals, was asked to leave the company.
Looking at these numbers and knowing the political situation and the Baltodanos’ connections, I believe the Israelis were forced to sell. A reasonable valuation of the company as of December 31, 2012, was between $8 and $10 million, plus cash on hand, which raised the value to between $9.5 and $11.5 million. However, the value as a going concern, which it effectively was, was between $37 and $50 million.
Baltodano Monroy and his partners purchased the plant for $7.5 million, a «bargain» that is difficult to understand without factoring in the Baltodanos’ relationship with Daniel Ortega. Since then, the Israelis have said nothing about this transaction.
The Fall of the Baltodanos
In 2017, Ortega also reaffirmed his confidence in the retired general and appointed him presidential minister for investment and foreign trade. His son, while keeping a low profile, worked to boost the geothermal business. Eight years later, it all ended. The Baltodanos were imprisoned by the regime. The father in May and the son in July, amid a political purge at the top of the state.
The Attorney General’s Office regained control of the Momotombo geothermal plant, revoked the concession, and accused the former official and his son of creating a corporate network to evade paying taxes to the Treasury.
It did not mention anything about the other partners, nor did it mention who will assume the license, after everything that happened. The case is secret in Nicaragua, and the partners of those being prosecuted have not commented either.
Cases in US Courts
The details of the Baltodano family’s modus operandi are public in US courts. Gamboa Rullán sued Álvaro Baltodano Monroy in January 2023 for damages in excess of $750,000, according to public file no. 164658103, filed in the Eleventh Judicial Circuit Court of Miami-Dade County, Florida.
One of the companies linked to Gamboa Rullán also requested legal assistance in case 1:25-cv-00076 before the Southern District Court of New York to obtain documentary evidence from The Clearing House Payments Company (LLC), a company based in the same district that operates a real-time payment and transfer system used by Baltodano Monroy.
Attorneys Joseph B. Rome and Edward H. Davis, of the Sequour Law firm of New York, representing Latham Geothermal Corp., filed a petition in early January of this year seeking to comply with a company liquidation procedure established under Cayman Islands law, which would allow for a fair and equitable distribution of assets.
The petition is accompanied by a testimony from corporate attorney Alecia Johns, who represents the same company, Latham Geothermal, in connection with the Cayman Islands proceedings.
Momotombo Power Company
OffshoreAlert, a specialized site that warns about «disputes, insolvencies, and fraud in high-value international finance,» published the request in the Baltodano case to the New York court.
At the end of the 39-page document, Johns describes the payment transactions involving Baltodano Monroy in the management of Momotombo Power Company (MPC) as «unlawful conduct»—in relation to the Cayman Islands proceedings.
MPC is the Cayman Islands-registered company that holds the concession from the Nicaraguan state. However, its owner is Central America Energy Holding Corp (CAEH). This company was controlled by Baltodano Monroy through Oscar Montes Mayorga, an executive with whom he had maintained close ties since 2010, according to court documents.
LA PRENSA also sent a message to an institutional email belonging to Montes Mayorga of MPC, but it bounced. In fact, Johns explained that Gamboa Rullán was excluded for years from accessing financial reports, and later stated in his statement that he was able to review some of them.
“Despite the safeguards previously established to protect the interests of Latam Geo and ensure the repayment of the loans to Mr. Gamboa, the applicant maintains that the affairs of CAEH and MPC have been conducted in an unlawful and oppressive manner, including with respect to a series of suspicious and unexplained transfers of funds to entities that the applicant claims are beneficially owned by Mr. Baltodano,” states the Latham Geothermal Corp. legal team.
Charanga with Funds
One of the most scandalous cases in MPC is a $25 million loan that the geothermal company Momotombo received in 2018 from the German bank Deutsche Investions-und Entwicklungsgesellschaft mbH (DEG). The loan was solely intended to carry out a gas pipeline expansion project, used by the company in its operations. It also went unpaid, and the loan was restructured several times.
According to the court report, one of the loan conditions was that six months of debt service had to be held in reserve. «DEG (the German bank) recently learned that the funds currently deposited in the DSRA amounted to only $1.06 million, a figure far below the equivalent of six months of debt service (which amounts to $1.5 million, maturing on December 16, 2024).»
Gamboa received MPC’s 2018 financial statements from the bank. However, they were different from the ones he was able to access from the company. Furthermore, the 2020 documents showed transfers to two entities in the British Virgin Islands: Geothermal International Services Ltd (GIS) and Geothermal Engineering Group Ltd (GEG).
GIS Case
In the GIS case, accounts payable in 2020 amounted to $25,610 and $715,650, while in GEG, they totaled $1,889,615 in 2019. These transactions were not approved by the company linked to Gamboa Rullán. According to an investigation they conducted in that jurisdiction, the ultimate beneficiary was Montes Mayorga.
Additionally, between 2015 and 2020, other information revealed loans and payments for alleged services to entities that appear to be controlled or owned by the retired general’s son, «including Comercial Agrícola del Sur, S.A. (Comasur), Cañas de Nicaragua, S.A. (Cadenicsa), and Integra Capital Group, as well as personal loans and payments to Baltodano and his relatives,» the legal team stated.
Therefore, it is important for them to know the amount of these transactions through the information that The Clearing House Payments Company, LLC can provide.
Interested in Eleven Names
In one of the annexes to the petitions filed by Latham Geothermal Corp.’s lawyers with the court, they include a list of 11 names, whose relationship with MPC they want to know more about.
They are asking the court to have Clearing House search for them in «transfer/payment messages» made by Momotombo Power Company through the Clearing House Interbank Payment System (CHIPS).
There are family members and two public officials: the president of the Nicaraguan Electricity Company (ENEL), Ernesto Martínez Tiffer, and former minister Emilio Rappaccioli Baltodano. What financial relationship do they both have with MPC? Enel signed the partnership agreement for the operation of the geothermal plant. How can this be explained?
Also appearing is university professor and former political prisoner Arturo Cruz Sequeira, detained by the regime on June 5, 2021, and released in February 2023.
The academic admitted by phone that he made an effort to «open doors» in El Salvador for Álvaro Baltodano Monroy, because the retired general’s son wanted to invest in gold. However, nothing came of it. «What he did was reimburse me or something like that, but you’re talking about a smaller amount. That’s all I know about that matter,» he commented.
The other names on the list are as follows:
Álvaro Baltodano Monroy, known as “Álvaro Baltodano,” “Álvaro Monroy”
Álvaro Antonio Baltodano Cantarero, known as “Cantarero” (retired general, Baltodano Monroy’s father)
María Eugenia Baltodano Monroy, known as “María Baltodano,” “Mary Baltodano,” “Eugenia Baltodano,” “María Monroy,” “Eugenia Monroy” (Baltodano Monroy’s sister)
Oscar Álejandro Montes Mayorga, known as “Oscar Montes,” “Oscar Mayorga,” or “Alejandro Montes” (Baltodano Monroy’s employee)
Ivania del Rosario Castillo Donaire, known as “Ivania Castillo,” “Ivania Donaire,” “Rosario Castillo,” “Ivania de Baltodano.”
Claudia Fernández Ocaña, known as «Claudia Ocaña» or «Claudia de Baltodano» (wife of Baltodano Monroy)
José Geovanny Rodríguez Cerda, known as «José Rodríguez» or «Geovanny Rodríguez»
Fernando Coronel Pichardo, known as «Fernando Pichardo»
“The petitioner limits its requests for CHIPS bank payment messages that mention or reference Mr. Baltodano and entities or persons known to be affiliated with, owned, and controlled, directly or indirectly, by Mr. Baltodano to the period from May 30, 2013, to the present,” states the legal team of Latam Geothermal Corp. in New York.
They also add to these companies: MPC, CAEH, Grupo Priza Holding, Integra Capital Group, Grupo Integra de Centroamérica, Geothermal International Services, Geothermal Engineering Group, Asesoría y Desarrollo de Infraestructura (Adisa), and Cadenicsa.
The documents indicate that the petitioners seek to identify undisclosed assets, including bank accounts and other personal and real property, to establish Baltodano Monroy’s ownership and control.
Momotombo Plant: A Glossary of Offshore Companies
The world of offshore companies is complex, but a review of the files reveals four key companies in the management of the Momotombo Geothermal Plant.
Latregion, registered in the Bahamas, is the recipient of the $8.6 million loan granted by Mexican businessman Gamboa Rullán on May 30, 2013. As of January 1, 2023, the debt stood at nearly $19.6 million, according to Gamboa Rullán’s lawsuit against Baltodano Monroy in Miami.
Latam Geothermal Corp., also based in the Bahamas, acquired the shares of Momotombo Power Company (MPC, the generator’s concessionaire) in June 2013, and it was agreed that MPC would repay the advances Latregion had made related to the loan.
Central America Energy Holding Corp (CAEH), founded on October 8, 2013, in the Cayman Islands, becomes the owner of 100% of MPC’s shares. It was controlled by Álvaro Baltodano Monroy, although its formal partners were Latam Geo and Integra (owned by the retired general’s son).
Momotombo Power Company (MPC), registered in the Cayman Islands. According to information from the Registry provided by OffshortAlerts, the partners were Gamboa and Oscar Montes Mayorga (close to Baltodano Monroy) in January 2025.
Integra de CentroAmérica, S.A. Owned by Baltodano Monroy. It conducts business in Central America and Mexico. It was established in Panama.
Sources for this report on Momotombo Power: Offshort Alerts, ICIJ, and US court documents.
