Iran will build a hydroelectric dam in northern Nicaragua, despite U.S. reservations, the energy minister said Thursday.

A state-owned Iranian company will build the $230 million Bodoke project on the Tuma River in the Jinotega province with financing by Iran’s export bank, Energy Minister Emilio Rappaccioli told Nicaragua’s Channel 2 on Thursday.

“The construction will take place once both sides reach an agreement on a series of factors that have to studied further,” Rappaccioli said.

The dam is one of numerous projects Iran agreed to sponsor in Nicaragua under accords President Daniel Ortega reached with Iranian Energy Minister Hamid Chitchian during Chitchian’s visit last August.

The visit came just a week after U.S. Ambassador Paul Trivelli warned the Central American nation about its increasingly close ties with Iran. But Trivelli also said that the relationship would not endanger the United States’ “good relations” with Nicaragua.

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