IIC approves financing for renewable energy projects in Colombia
07/15/2008The loan proceeds will help increase the installed capacity of Colombia’s energy system
Washington, D.C. - On July 15, 2008, the Inter-American Investment Corporation (IIC) approved a loan of up to US$7,850,000 to Guanaquitas, S.A. E.S.P., and a loan of up to US$7,650,000 to Caruquia Información S.A. E.S.P. These two utility companies will carry out the Guanaquitas and Caruquia hydropower projects, respectively. The projects encompass building and operating two hydropower plants on the Guadalupe River, in the municipality of Santa Rosa de Osos, Antioquia (95 kilometers north of Medellin). The plants will have an installed capacity of 9.8 MW each. Combined, they will generate 124.1 GWh of clean energy per year.
Colombia has many hydrological basins, so there is significant potential for power generation. However, due to increased power demand resulting from economic growth, Colombia still depends on environmentally damaging thermopower plants. The Caruquia and Guanaquitas projects divert the natural flow of the Guadalupe River; such run-of-the river power plants do not require reservoirs and have minimal environmental impact. These two projects are an example of the use of clean, efficient technology in Latin America.
Seventy-seven percent of Colombia’s power comes from hydropower sources, but given that the demand has exceeded the supply from hydropower plants, market prices are set by inefficient facilities. Caruquia and Guanaquitas’ low costs will help mitigate market price increases.
Colombia has extensive natural resources for renewable energy generation, but the local financial system does not offer financing on the terms needed by this type of project. The IIC is thus playing a key role in this operation, helping demonstrate that it is viable for the private sector to invest in small hydropower projects and offer them long-term financing.
The Inter-American Investment Corporation is a multilateral financial institution that is a member of the Inter-American Development Bank (IDB) Group. It provides financing (in the form of equity investments, loans, guarantees, and other instruments) and advisory services to private enterprises in Latin America and the Caribbean. In 2007, the IIC reached US$1.2 billion in assets and approved 62 transactions channeling US$470 million to SMEs in the region. The IIC’s mission is to promote the economic development of its regional member countries by encouraging the establishment, expansion, and modernization of private enterprises, particularly those that are small and medium in size. For more information on the IIC’s activities, please visit www.iic.int.
Contact: Jorge Ciurlizza
Telephone: (202) 623-3932