The International Finance Corporation (IFC) announced on Monday that it is investing USD 10 million (EUR 9.5m) in Colombian power retailer and aggregator Vatia to support the advance of non-conventional renewable energy (NCRE) in Colombia.
The investment will take the form of preferred equity, and will be complemented with IFC’s assistance to enable Vatia to secure financing of up to USD 36 million in long-term debt, the World Bank Group member institution said.
The overall support by IFC will enable the company to acquire greenfield solar assets and strengthen its capital position so as to expand and diversify its generation capacity in Colombia.
According to IFC, Vatia handles an annual demand of around 1,300 GWh of power per year, with non-conventional renewables making up some 400 GWh/year of the total.
Although Colombia’s power mix is one of the cleanest in the world, thanks to large-scale hydroelectric plants, the share of NCRE is negligible despite the country’s potential.
“We welcome IFC's long-term funding that is not readily available in a domestic market given the nascent business model. It will help demand aggregators like us play a key role in promoting NCRE, either through our own generation or by acting as off-takers for new projects,” Vatia CEO Luis Fernando Sandoval said in a statement.
“[A]ggregators can provide long-term contracts, a key hurdle in the Latin America and the Caribbean (LAC) region, with high hydro penetration and price volatility depending on weather patterns," Sandoval added.
(USD 1.0 = EUR 0.953)
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