The Energy Regulation and Markets Review - Stikeman Elliott

Colombia
five projects assigned, four were led by the private sector 2 and the other by a state entity.
Moreover, one has a majority of foreign investment, mostly from a Chilean group.
In connection with new regulation, the CREG undertook several studies in order
to find other alternatives to warranty firm energy obligations. In this context, it issued
Resolution 106 of 2011 extended by Resolution 139 of 2011, by means of which it is
possible to ensure firm energy obligations with imported natural gas. Generators wishing
to use this new regulation must build and operate their own import facilities and have to
prove to the CREG that they have a supply agreement.
It is also worth mentioning that several market players have financed their future
investments in the international markets. For instance, EMGESA, EEB and TGI issued
debt in the international market. In all three cases, the issuance exceeded all expectations.
VII
CONCLUSIONS and OUTLOOK
Gradually, the Colombian electricity sector has been gaining weight and importance in
the current economic structure. This sector currently accounts for 2.03 per cent of total
GDP in Colombia. It also constitutes a significant source of employment generation,
exports and innovation.
The next challenge for the Colombian energy sector is to implement regional
interconnection. Currently, the NIS is physically connected with Ecuador and Venezuela.
Ecuador has integrated its regulatory parameters with Colombia in such a way that
international transactions are permitted; however, the goal is to interconnect more and
more countries. For this reason, recently Colombia entered into a $420 million agreement
with Panama, which would grant access to Central America’s regional electricity market.
Similar opportunities are present in other South American countries such as Chile, Peru
and Brazil.
Furthermore, according to the government, now Colombia has an installed
capacity of power generation of 14,000MW and consumes only 8,500MW leaving a
significant excess capacity that can go into neighbouring markets. With new hydroelectric
projects in progress, such as Hidroituango, Porce IV, the Quimbo and Hidrosogamoso,
the installed capacity in the country could increase by as much as 5,000MW.
2 Hidroeléctrico del Río Ambeima, Central Hidroeléctrica Carlos Lleras Restrepo and San
Miguel, Gecelca 32 and TermoTasajero II.
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