In this paper I conduct a historical analysis of the emergence of ALBA in Nicaragua prior to Daniel Ortega's return to the presidency and the country's official membership in the initiative from January 2007 on. I argue that ALBA is a rival structure that evolved from the contradictions inherent in hegemonic globalisation. Within the framework of a material analysis of poverty and exclusion under globalised neo-liberalism, I draw particular attention to the World Bank-led education "decentralisation" in Nicaragua. The failure of the finance-driven strategy, especially with respect to access to education and literacy, provided the grounds for the first ALBA project in Nicaragua to evolve within an "environment of ungovernability" from 2004 on. The response and challenge provided by ALBA builds on the regionalisation of Venezuela's endogenous development paradigm guided by the principles of solidarity, cooperation and complementarity. In contrast to other contemporary regionalisms, in ALBA the social dimension assumes a leading role from the outset, together with energy integration. The Nicaraguan case exemplifies ALBA's counter-hegemonic transnational operational mode, as well as its construction from the bottom up. This is illustrated in the fields of education, health care and energy supply. (Contains 13 endnotes.)