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How Colombia Can Overcome Regulatory Barriers to Unlock Its Renewable Energy Potential

AN EXCLUSIVE INTERVIEW WITH:

A Sector Poised for Growth but Stuck in Bureaucracy 

Colombia has demonstrated great potential in renewable energy, reaching an installed capacity of 2 gigawatts (GW) in 2024, marking significant growth compared to previous years. Additionally, by 2025, 19 new projects are expected to become operational, adding 670 megawatts (MW). However, this growth could be slowed by regulatory barriers that affect the implementation of new projects.

The Reality of Colombia’s Renewable Energy Market 

The renewable sector in Colombia faces several difficulties related to regulations and bureaucracy:

  • Delays in permits and licences: Obtaining environmental and technical approvals is a slow and bureaucratic process. Many companies report that processing times can extend up to two years.
  • Political and regulatory uncertainty: The lack of clarity in energy policies creates doubts among investors regarding the long-term feasibility of projects.
  • Prior consultations and social conflicts: 57% of halted projects in Colombia in 2024 are linked to tensions between local communities and developers, particularly in regions like La Guajira.

Impact on Investment and Sector Development 

Regulatory uncertainty has led to 47% of companies in the sector failing to complete their investments in 2024. The estimated investment in renewable energy for 2025 is $500 million, but this amount could decrease if barriers persist. Furthermore, the difficulty in developing projects in certain regions is causing investment to be concentrated in a few areas with fewer conflicts.

Solutions to Unlock Sector Growth 

To ensure the sustainable development of renewable energy in Colombia, it is essential to address these issues with concrete measures:

  • Streamlining regulatory processes: Establishing more efficient mechanisms for project approvals and reducing processing times.
  • Ensuring political and regulatory stability: Defining long-term policies to provide confidence to investors.
  • Strengthening dialogue with local communities: Implementing early participation strategies and mutually beneficial agreements to reduce social conflicts.
  • Promoting fiscal and financial incentives: Creating financing mechanisms and tax benefits for renewable energy projects.

If Colombia wants to attract investment and ensure energy security, it must act now. Cutting unnecessary bureaucracy, strengthening regulatory frameworks, and improving investor confidence will be key to unlocking the full potential of renewables. The time for change is now.

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