THE US Congress opened debates yesterday on punishing left-wing Nicaragua with a block on development loans for up to five years.

House of Representatives foreign affairs committee chair Ed Royce scheduled debate on a new draft of the Nicaraguan Investment Conditionality Act (Nica) from Florida Rep Ileana Ros-Lehtinen.

Mr Royce led the charge in Tuesday’s Congress vote for new sanctions on Russia — over election meddling claims — that will force European countries to buy expensive US gas.

Nica could block 70 per cent of funding for infrastructure and social programmes in the Central American nation.

The text of the Bill trots off US State Department claims that democracy, the rule of law and freedom of association and expression are under threat in Nicaragua since the re-election of Sandinista President Daniel Ortega in 2007.

It directs the president, State Department and Treasury to instruct its directors on the boards of international finance institutions to block any loans to Nicaragua until it complies with US demands — or for five years after the act is passed.

While the list of development banks includes those in Africa, Asia and the Middle East, the most crucial are the World Bank and the Inter-American Development Bank.

Despite US claims to be defending Mr Ortega’s opponents, almost all opposition parties oppose the Bill which the government says would reverse years of strong economic growth.

Even Washington-based Organisation of American States (OAS) secretary Luis Almagro, who has led attacks on Nicaragua’s ally Venezuela, said Nica was “not a constructive contribution to work.”

Earlier this week US ambassador to Nicaragua Laura Dogu said she believed Congress would pass Nica as Managua “does not have many friends in Washington for the support it gives to Venezuela.”

She said the Ortega government had been “speaking even stronger than Venezuela itself in favour of Venezuela.

“It is normal for a country to do it for itself, but not for another to do so.”

Ms Ros-Lehtinen first introduced Nica last September, ahead of Mr Ortega’s landslide election victory that November.

It passed a vote of Congress but outgoing president Barack Obama did not sign off on its progress to the Senate before leaving office.