Norfund Commits $20M to Boost Solar Energy in Colombia

Thorough: Norfund has significantly ramped up its investment in Colombia's solar energy sector with a USD $20 million subordinated loan to Erco Energía. This brings the total investment to USD $50 million. Erco Energía plans to use these funds to advance the development and construction of solar projects across Colombia, which will, in turn, create jobs and improve the region's electricity supply. The investment also seeks to draw in further funding by engaging a top national financial institution for senior debt financing, a step critical for addressing capital access issues crucial for achieving a net-zero emissions target by 2050. Given Colombia's current reliance on hydroelectric power, diversifying into solar energy will enhance energy security amid climate-related challenges such as drought. Currently, solar energy contributes to a small fraction of the country's electricity, but this is projected to rise significantly by 2037. Norfund commends Erco Energía for its innovations and contributions to renewable and digital energy solutions. Erco has robust plans to expand its operational capacity significantly by 2030. Moreover, Erco's community engagement strategy includes initiatives that ensure community benefits through training and infrastructure improvements, fostering support and sustainability.