5 minutes

Colombia’s Renewable Energy Investment and Development

Mr. Julio Cesar Puentes, Foreign Investment Vice-President at ProColombia
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London, 12 February 2024. ProColombia is at the forefront of transforming Colombia into a renewable energy powerhouse, catalyzing foreign investment and fostering innovative green energy solutions for a sustainable future.

In this insightful interview with the Vice-President of Foreign Investment at ProColombia, we delved into the dynamic landscape of foreign investment in Colombia’s renewable energy sector, the strategic role of ProColombia in fostering green energy initiatives, and the exciting potential for international collaborations in technology transfer and investment.

Current Landscape of Foreign Investment: “Mr. Puentes, could you provide an overview of the current state of foreign investment in Colombia, particularly in the Renewable Energy industry?”

A: “Colombia is a country that is open and friendly to Foreign Direct Investment (FDI), as it recognizes the added value brought to the country through both direct and indirect positive impacts on the productive sector.

In the case of Renewable Energies, the country has made a concerted effort to develop a public policy aimed at increasing the participation of Non-Conventional Sources of Renewable Energy (NCSRE) to further diversify our energy matrix.

Under the 1991 Constitution, the government guarantees the provision of this service, and at the same time, promotes private participation and free competition. This has led to multiple government initiatives that have sought to encourage investment in renewable energies, such as energy auctions, the creation of incentives (particularly stemming from Laws 1715 of 2014 and 2099 of 2021), as well as adjustments to the sector’s regulations aimed at achieving greater participation in projects to diversify the energy matrix and reduce dependence on non-renewable sources.

Evidence of this is reflected in the foreign investment established in the country from Asian, European, North American, and Latin American markets, whose foreign companies recognize our potential and have demonstrated their commitment and interest in the optimal development of projects to carry out a significant portfolio of projects in Colombia.
This will allow for an increase in the installed capacity of our energy matrix, which to date amounts to more than 19MW, and while the majority comes from renewable sources, primarily through hydraulic generation, by 2032, we expect to have a capacity of more than 42MW. Undoubtedly, this purpose involves significant synergies with private and foreign capital.”
This translation maintains the professional and informative tone of the original Spanish text, suitable for an audience interested in Colombia’s energy sector and foreign investment policies.”

(1 – This statement is available if we consider showing these figures: ‘Investment in clean energy in Colombia was around $1,178.4 million in 2022, an increase of 23.66% compared to 2021 ($952.95 million). Between 2017 and 2022, the highest investment in clean energy was in 2022 with $1,178.4 million, while the lowest was in 2017 with $29.91 million. Climatescope, Bloomberg, 2023.)

Role of ProColombia in Green Energy: “How do you see the organization’s role in fostering and promoting green energy initiatives both domestically and internationally?”

A: As an entity affiliated with the Ministry of Commerce, Industry, and Tourism, ProColombia is the organization responsible for the country's brand, the promotion of exports, international tourism, and foreign investment in Colombia.

The Foreign Direct Investment (FDI) Attraction Strategy for Sustainable Development stems from our Ministry’s Reindustrialization Policy, which seeks to transition from an extractivist economy to a knowledge-based, competitive, and sustainable economy through productive commitments.

Indeed, one of these commitments is precisely the promotion of clean energies. At ProColombia, we support local projects and companies as well as foreign investment that aim to expand Non-Conventional Sources of Renewable Energy (NCSRE), decarbonize the economy, develop renewable fuels, sustainable mobility, and distributed energy resources.

Additionally, in line with the National Development Plan ‘Colombia, Power of Life,’ we support the guidelines of the Just Energy Transition Roadmap of the Ministry of Mines and Energy, and promote the government strategy known as ‘Burst 6G,’ which aims to incorporate 6GW of renewable energy between 2023 and 2026. We are committed to attracting renewable projects that aim for sustainable economic development, involving energy communities and contributing towards a more environmentally respectful production model.

Thus, both at the local, regional, and international levels through our network of offices and with the support of the Regional Investment Promotion Agencies (APRIs), ProColombia’s role is crucial as an intermediary between private companies and national and regional governments to support decision-making and position Colombia as an ideal investment destination.”

International Collaborations: “Could you discuss any international partnerships or collaborations that are currently aiding Colombia’s green energy sector, especially in the context of technology transfer and investment?”

A: “Colombia has signed memorandums of understanding and joint declarations that promote processes of technical, scientific, technological, regulatory, and innovative cooperation in the area of energy transition. To highlight some examples, the following can be noted:

In the first half of 2023, with international cooperation from the World Bank and the Danish Energy Agency, support was received in the creation of the tender documents for the country’s first offshore wind energy round, officially published within the framework of COP 28.

The 2021 Hydrogen Roadmap developed with the support of the United Kingdom. Here, German cooperation supported the complement of this Roadmap with a focus on Power to X, launched at the end of last year.

In the context of the H2Meet held in South Korea in September 2023, ProColombia and K2Korea signed an agreement to promote the development of a robust hydrogen ecosystem in both countries, through the exchange of information, seminars, or promotional events involving sector experts and investors.

Since November 2023, Colombia has joined with Argentina, Chile, Ecuador, Uruguay, Panama, the Dominican Republic, Guatemala, Bolivia, Honduras, Trinidad and Tobago to sign the Joint Declaration for the implementation of a clean and/or low-emission hydrogen certification system and its derivatives for the region (CertHiLAC: Clean Hydrogen Certification System for Latin America and the Caribbean).

Finally, it is relevant to highlight that the Ministry of Mines and Energy has sought to strengthen international relations in the energy sector focused on a just energy transition, which has generated approaches with the Energy Subgroup of the Group of International Cooperators in Colombia and has included ambassadors from the Americas, Asia, and Europe.”

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Challenges and Solutions: “What are the major challenges Colombia faces in the transition to green energy, and what strategies are being implemented to overcome these obstacles?”

A: “On one hand, while Colombia has high potential for generating energy with Non-Conventional Sources of Renewable Energy (NCSRE), we are not exempt from facing climate challenges such as the El Niño phenomenon or forest fires. In response, our institutions are working on contingency plans to ensure electrical supply and prevent possible impacts to the energy infrastructure.

Colombia has enhanced its renewable generator park and is constantly working to mitigate its exposure to climate variability. In any case, raising greater awareness about energy consumption habits is also the responsibility of the private sector and the general public.

The country faces the challenge and the opportunity to power the Non-Interconnected Zones (ZNI) with clean energy and to promote Energy Communities located in both vulnerable urban areas and rural regions.

There are 3 million people who do not have access to energy services, so to meet this need, we have a presidential goal of having 20,000 Energy Communities operational in the country.

As part of the National Development Plan-PND, Decree 2236 of December 22, 2023, lays out guidelines to regulate the strategy aimed at fostering the self-generation of electrical energy by communities. At ProColombia, we have witnessed success stories of foreign companies involved in energy community projects whose best practices are significant in local implementation.

On the other hand, we have a solid institutional framework in the sector, composed of entities with very clear missions and functions. The interest in renewable sources has more than doubled the capacities of these entities, so another identified challenge is the need to streamline procedures and processes to maintain the timelines of legal mechanisms and ensure investment security with clear rules for all actors.

The National Government and sector entities have made a series of efforts to expedite processes and strengthen institutions, as the growth of the sector has required the development of greater capacities.

In particular, we recognize this institutional strengthening in entities such as the Ministry of Mines and Energy, the Mining-Energy Planning Unit (UPME), the National Authority of Environmental Licenses (ANLA), among others, which have sought to create spaces with companies in the sector to share relevant information or prioritize pending procedures in progress.

We highlight the High-Level Energy Table-MANE led by the Ministry of Mines and Energy, which aims to understand the procedures that are delayed in response and support them with the corresponding entities. Ultimately, compliance with the legal timelines of the procedures will allow the projects to be operational within the agreed timeframes.

With the aim of generating greater articulation around NCSRE, the Ministry of Mines and Energy and the UPME lead the National Knowledge Network within the framework of the Educational Pact for Mining-Energy Planning for the Just Energy Transition, which, as UPME has explained, seeks collaborative work among social, governmental, and community actors who will form the network, focusing on energy democratization, knowledge management, interdisciplinarity, and the promotion of research processes in the sector. In this dialogue, we also emphasize the work of the guilds in gathering observations from companies and generating proposals and collaboration towards sector improvement.”

(We also learned about this network in the middle of a meeting with the Director of Energy of the MME. Access here: )

Investor Incentives: “What incentives or support does ProColombia offer to foreign investors interested in Colombia’s green energy sector?”

A: “It is important to clarify that, although ProColombia is an entity affiliated with the Government, we do not provide incentives per se to foreign investors, whether potential or established in the country, in this or any sector.

Strictly speaking, the Mining-Energy Planning Unit (UPME) is the entity responsible for receiving applications for incentives from the sector under Law 1715 of 2014 mentioned earlier. What the question may refer to is the support provided by ProColombia, in our case, through the Vice Presidency of Investment, which are services offered free of charge and across the board to foreign investors through the following activities:

Service Kit for new and established foreign investors: This is a set of services that add value to the investor and can help facilitate the decision to invest in Colombia. This includes support for the investor, tailored information, opportunity finder, seminars for opportunity dissemination, investment events, investment agendas, support for both new and established investors, among other activities.

Colombia Investment Summit – Foreign Direct Investment Macroround: This is the main foreign investment promotion event in Colombia, featuring an academic session. For the 2023 edition, the CIS was held from November 20 to 21 and included a special roadtrip version in selected departments. We hope to soon confirm the dates for the 2024 edition.

ProColombia Pitch Session for foreign capital funds looking for Colombian projects ready for foreign direct investment: An activity where Colombian entrepreneurs with ‘ready to sell’ projects have 5 minutes to present them to potential international investors interested.

Virtual tool to identify investment opportunities in Colombia – Invest in Colombia: This website includes investment opportunities from all sectors and seeks to promote Colombia as a business and investment destination, for the relocation of operations of multinational companies, and as an export platform.”

Investment Prediction: “Under the umbrella of renewable energies, in your opinion, which sector has the most potential for foreign investment?”

A: “According to a recent report by the renewable energy guild, SER Colombia, the participation of Non-Conventional Sources of Renewable Energy (NCSRE) will reach 9% of the total capacity of Colombia’s generator park, whereas historically, they have represented less than 1%. This marks a milestone in Colombia’s transition towards a more diverse and sustainable energy matrix. In this regard, solar energy, wind energy, offshore wind energy, energy storage, small hydropower plants (PCHs), geothermal energy, biomass, zero and low-emission hydrogen; and technologies related to energy efficiency are all areas of interest for foreign investment in the country’s renewable energy sector.

By 2028, we will have about 25.2 GW of installed renewable energy, making it one of the electricity sectors with the highest integration of renewables globally. This scenario adds to the interest of foreign investors in generating energy from NCSRE, and in implementing sustainable energy solutions for Non-Interconnected Zones (ZNI), battery energy storage systems, individual photovoltaic systems, the contribution we mentioned with Energy Communities, hybrid systems or those with NCSRE in ZNI, and also, within the sector’s chain, the expansion or improvement of transmission and distribution infrastructure executed via public tender.”

Future Outlook: “Looking ahead, what are your long-term goals for foreign investment in Colombia? How do you envision the role of ProColombia evolving to meet these goals?”

A: “We see an optimistic outlook with entities, companies, guilds, and communities committed to contributing to the goals of the Just Energy Transition Roadmaps, Hydrogen, or Offshore Wind Energy.

Our goal is and will continue to be to promote the involvement of Foreign Direct Investment (FDI) in this purpose by attracting projects aligned with the goals of the National Government and around the Sustainable Development Goals (SDGs) that bring us closer to international socio-environmental commitments. In fact, according to the IDB, FDI is one of the main sources of external financing for developing economies; it attracts synergies, creates jobs, transfers knowledge and technology, promotes the improvement of public policies and the investment climate, and stimulates local capital. This is what is known as the virtuous cycle of FDI.

From ProColombia and the Ministry of Commerce, Industry, and Tourism, we will strive to attract foreign investment that promotes the diversification of the energy matrix with NCSRE and efficient energy management. In the words of the electric generation trade association, ACOLGEN, Colombia has 13GW of renewables and we will incorporate about 12.1GW in the next 5 years. By 2028, we will have about 25.2 GW of installed renewable energies, making it one of the electricity sectors with the highest integration of renewables globally.

This scenario adds to the diverse interest we have identified from foreign investors in energy generation from NCSRE in general, as well as in the implementation of sustainable energy solutions for Non-Interconnected Zones (ZNI), battery energy storage systems, and individual photovoltaic systems.

The contribution we mentioned with Energy Communities, hybrid systems or those with NCSRE in ZNI, and within the sector, the expansion or improvement of transmission and distribution infrastructure executed via public tender, aims to achieve greater reliability and support for the energy sector, and the implementation of Advanced Metering Infrastructure (AMI) and the expansion works of the National Transmission System (STN).

Our role will continue to be to bring these opportunities to investors from Europe, Asia, North America, the Caribbean, and Latin America so that they choose Colombia, the Country of Beauty, as their best destination for investment, growth, and expansion.”


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