Colombia

Diversifying Colombia’s energy mix requires an enhanced enabling environment and capital flows beyond the recent influx of new investment into the country. While a majority of the recent capital flows were for utility-scale solar projects, market concerns such as unclear auction processes, long-term PPAs and/or loans, and construction risk hinder further investment required to diversify Colombia’s renewable energy sources.

Energy demand in Colombia is forecasted to increase by 60% over the next 30 years. Working today to diversify and scale the renewable energy sources feeding into Colombia’s energy mix will reinforce the ability to have this demand met with a reliable and clean supply of generation for tomorrow.

Colombia is at an inflection point where being the most biodiverse country in the world per square kilometer can be harnessed and leveraged – or continue to threaten its economic position and inhabitants – as the world faces the growing impacts of climate change.

Natural disasters in Colombia have caused up to $8 billion in loss and damage. Efforts to build climate resilience into the country’s infrastructure must be accelerated and scaled, which requires effective public-private collaboration, mobilization of capital flows, and an enabling environment that encourages such changes.

The private sector – including through CFLI Colombia members – can help mobilize the capital needed to better prepare the country for the impacts of climate change while also working with the Colombian government to enhance the enabling environment to further attract capital to scale solutions.

Transport is a key emitting sector in Colombia, accounting for approximately 41% of the country’s greenhouse gas emissions in 2019. Decarbonizing the sector is key to lower emissions. However there is little incentive for residential or commercial adoption at the scale needed to see impact.

CFLI Colombia members seek to advance the Colombian Government’s decarbonization efforts by executing transportation-related financing solutions and forwarding policy recommendations that encourage deployment and adoption of low-carbon vehicles throughout the country.

Creating an ecosystem that reinforces the adoption of less carbon-intensive fueled vehicles coupled with financial incentives to make these vehicles an attractive option is critical to transitioning the transportation sector. Further, companies must be incentivized to develop the ancillary infrastructure associated with scaling low carbon vehicles.

By connecting the government’s ambitions with private sector resources, CFLI Colombia members can help to develop an ecosystem where transactions that facilitate the deployment and adoption of less carbon-intensive fueled vehicles can be executed, ultimately supporting the country achieve its decarbonization goals for the transportation sector.

52% of Colombia’s territory is comprised of non-interconnected zones, where an overwhelming majority of generation derives from diesel. In more developed parts of the country, energy infrastructure, such as energy networks and interconnection, is in critical need of upgrades and expansion to accommodate the increase in generation demand and climate change impact, which is causing major damage to the country’s critical infrastructure.

CFLI Colombia members seek to support the government’s target of reducing emissions by 51% by 2030 while also scaling clean energy deployment to accommodate for the projected 60% increase in energy demand by 2050. Through the development of creative financing solutions and working to enhance the enabling environment, members seek to unlock capital to improve access to clean and reliable energy, develop back-up battery energy storage systems, and strengthen the country’s grid infrastructure.

CFLI Colombia members can accelerate the government’s sustainable infrastructure goals by increasing energy access and improving the quality of service by developing financing and policy solutions. Public-private partnerships between the Colombian government and private sector are necessary to structure, finance, develop, and maintain sustainable and resilient grid infrastructure throughout the country.

Upgrading energy storage capacity, increasing grid resiliency and strength, and creating reliable back-up systems for grids will allow renewable energy projects to be better integrated into the country’s current infrastructure, lessening Colombia’s dependency on carbon-intensive back up fuels.