Colombia Engages Private Sector and Forges Energy Future

Speeches Shim

After awarding nine power purchase agreements, Colombia incorporates a private sector engagement strategy to ensure renewable energy projects are completed.

Today, many developing countries are creating policy, legal, and regulatory frameworks to attract private investment in clean energy, increase energy efficiency, and expand electricity access. USAID works in partner countries across all aspects of the energy sector to support their journey to self-reliance.

USAID and the Colombia Ministry of Mines and Energy Partner on Auctions

The Government of Colombia held its second renewable energy auction and awarded power purchase agreements to nine solar and wind projects on October 22, 2019, with a total capacity of 1,374 MW. Procuring energy using a competitive, transparent process increases Colombia’s energy resiliency and the sector’s ability to reliably meet electricity demand by incorporating more clean energy into the generation mix. In addition, all Colombians will enjoy the benefits of reduced greenhouse gas emissions and more affordable energy.

After this historic achievement, the Government of Colombia’s Ministry of Mines and Energy (MME) strategically decided to incorporate private sector engagement to ensure project completion. Across Latin America and globally, power projects have experienced delays, cost overruns, and sometimes cancellations due to insufficient engagement with the private sector, communities, and other stakeholders. Communities often perceive that the benefits of the power infrastructure do not reach the local population, and those most affected are not involved in the process, which can result in resistance to projects and unrest.

Led by the Office of the Vice President, the Government of Colombia set out to develop a comprehensive and multi-sector initiative to address a number of issues in Guajira, the state where the majority of awarded projects would be located. While Guajira is rich in some natural resources, it is a desert region and one of the most impoverished parts of Colombia.

As part of this initiative, USAID is supporting the MME, labor ministry, and other stakeholders in the development of a workforce plan that would construct and operate an expected first wave of about 2,531 MW of renewable energy between 2021 and 2024, consolidate a development engine for the region, and catalyze long-lasting economic benefits for the local population.

USAID, through the Scaling Up Renewable Energy (SURE) project, is helping Colombia develop policy, regulatory, and business environments to procure renewable energy through reverse auctions. The auction represents an opportunity to bring low-cost renewable energy, while promoting investment in Colombia’s energy sector.

Happy woman relaxing with wind generators turbines beautiful sunset background.
Happy woman relaxing with wind generators turbines beautiful sunset background in Khao Kho mountain, Petchabun, Thailand.
© theeraphong / Adobe Stock

Auctions are best practice for procuring least-cost energy. This competitive, transparent process helps countries meet their energy and climate goals and attract investment into their clean energy futures.

In today’s rapidly evolving renewable energy marketplace, it can be challenging to keep track of current best practices in renewable energy policy, innovations, and market trends. USAID developed the Renewable Energy Auction Toolkit to help international development professionals, energy ministries, utilities, policymakers, and regulators to design and successfully implement energy auctions that expand access to affordable and sustainable clean energy.

Mother holding her son in nature. Wind turbines in the background.
Through the Scaling Up Renewable Energy program, USAID helps partner countries power economies with renewable energy, meet international climate commitments, and open markets to private investment and competition.
© Viktor Pravdica / Adobe Stock

Technological advancements continue to drive renewable energy prices down, often making electricity from solar and wind cheaper than fossil fuels. Renewables increase investment opportunities, generate revenue for landowners, reduce emissions, and create jobs in rural and remote areas where industry and employment may be scarce. USAID’s Scaling Up Renewable Energy (SURE) program helps countries meet bold international climate commitments by accelerating their transition to more widely accessible, affordable, reliable, and sustainable energy. SURE provides renewable energy planning, procurement, and grid integration services. Our trainings, tools, and resources help policymakers, utilities, and regulators modernize energy sectors and create policies that enable renewable energy markets to flourish.

Wednesday, July 15, 2020 - 5:00pm

Last updated: December 03, 2021