This should prove to be an interesting exercise from several points of view.
First, politically, it could be dynamite. America does not take kindly to meddling in it's back yard - the Munroe Doctrine is still alive and well. I cannot see that Chinese involvement on this scale in Central America will be at all welcome. Not to mention the hostility between the governments of Nicaragua and America that has already existed over the past forty years or so.
Second, when I checked the Wikipedia entry on Lake Nicaragua, I ran across the following quote: "The lake has a reputation for periodically powerful, unnavigable storms." Will the Chinese engineers have a workable solution for this problem? And the potential problems go on from there....
Nicaragua is not bound by this. Doctrine is not the same thing as the legal law and for some odd reason, when American's try to enforce American laws on somebody else's soil, that somebody else tends to get a bit cranky about it.
Michael: I am aware that the Munroe Doctrine does not have the force of law; it never has. It was merely a very loud declaration made by the Munroe administration that other powers, meaning the Europeans, were not welcome in the Western Hemisphere. Effectively, this means that the Americas were (and I would argue, remain) the sole sphere of influence of the USA. The British, however, begged to differ and had a big fleet and lots of soldiers, so Canada remained British (rah!). I recognize this is a political/historical argument, and its continuation may not be appropriate to this site. American policy with reference to what are arguably strategic activities by the Chinese in Central America will unfold as it may.
It would appear to me then that you understand that the Monroe Doctrine is NOT alive and well then. (Arguably, the U.S. is not very "well" either, but that's a political rant best left to another forum.)