The transport sector is the second largest energy consumer in Nicaragua, and it relies solely on oil derivatives. It is growing at an unsustainable rate and Nicaragua must explore alternative transport pathways to decarbonize this sector. This study developed 5 scenarios to assess transport alternatives for Nicaragua such as a mass public transport system for the country's capital, the adoption of electric vehicles, and a shift to electrofuels. The scenarios reflect the Nicaraguan energy system in 2030 after the implementation of these alternatives. The results show that stabilizing the transport demand via public transport is a key aspect to achieve decarbonization cost-effectively. Furthermore, the results highlight the direct link between the decarbonization of the transport sector and of the power sector. The adoption of electric vehicles and the production of electrofuels create synergies between the two sectors making them suitable options to integrate higher shares of variable renewable energy in the generation matrix. These synergies increase the overall efficiency of the system and reduce operating costs and CO2 emissions.