Hydroelectric power: Discover the country where rivers illuminate cities
Part of Colombia's beauty lies in the power of its nature. Its unique geography has fueled economic growth alongside the talent of its people, particularly in the renewable energy investment sector. From powerful winds to intense sunlight and flowing rivers, Colombia has emerged as a regional leader in the energy transition.
Discover how water has become a source of electricity to illuminate a large part of the country and the opportunity to invest in hydroelectric power in Colombia.
How this Colombian energy sector works today
To understand why this type of renewable energy is so powerful, it is necessary to know its current status in Colombia. So far, the country has developed a robust infrastructure to harness its abundant water resources for sustainable energy generation.
Currently, we already have years of experience building this type of infrastructure and that is why hydroelectric energy now contributes almost 70% of the electricity consumed in the country.
While Colombia is actively diversifying its energy portfolio, hydroelectric power remains a cornerstone of its energy system and is poised for continued growth in the coming years.
The growth of Colombia's hydroelectric sector has been propelled by private initiatives and public-private partnerships. Key players in this industry include EPM, Isagen, and Celsia, which manage both large-scale and smaller hydroelectric plants to supply electricity for domestic consumption and export.
Prominent facilities such as Porce III, Guatapé, San Carlos, El Guavio, and Betania are spread across diverse regions of Colombia, showcasing the country’s extensive infrastructure for the growth of renewable energy.
Find out here if this is the ideal time to invest in solar energy in Colombia
Colombia's energy potential
Colombia offers fascinating opportunities for international investors. According to the Mining and Energy Planning Unit (UPME), the potential installed capacity is 65 GW, being the sixth country in the world with the largest renewable water resource, with 2,360 km3 of water per year.
This strategic advantage allows Colombia to compete effectively on a global scale while benefiting from energy independence, as its electricity supply can be derived from domestic resources, reducing reliance on international producers.
On the other hand, at the beginning of 2024 it was reported that Colombia had installed 19,898.6 MW of net effective capacity to generate electricity. 66.4% was from hydro sources. This exceeds what had been reported in previous years. For example, in 2021 this figure was 17,761.67 MW, of which 62.17% corresponded to the country's water resources.
Discover four reasons why you should invest in electric mobility in Colombia.
The opportunities offered by Colombia
Hydroelectric power offers Colombia a chance to diversify its export portfolio. The country already has experience in this area, as it has already exported electricity to other countries in the region. If greater results are achieved in the production of this good, Colombia could reach new destinations in the world.
Colombia's strategic location is also a boost to achieve this, since the country is located in the heart of the Americas, which facilitates transportation logistics of goods of Colombian origin and offers competitive arrival times to other countries in the region, which is undoubtedly an advantage for businesspeople who invest in the country.
Advantages of hydroelectric energy also presents a compelling opportunity for Colombia, particularly as a foundation for the green hydrogen industry. This renewable and sustainable energy sources can play a pivotal role in driving the growth of this emerging sector.
This is an especially strategic opportunity, as Colombia has the potential to produce the fourth most competitive green hydrogen in the world, thanks to its natural resources and the advancement of the national energy infrastructure.
How can investors benefit?
Colombia offers a whole package of benefits for sustainable investments in the country, as it seeks to position itself as one of the pioneers and leading countries in the energy transition at a regional and global level. These benefits are designed for investors seeking to come to the country with sustainable hydroelectric projects. These are some of those benefits:
- The sale of electricity generated based on wind, biomass or agricultural waste, solar, geothermal, or sea energy will be exempt from income tax for 15 years, starting in 2017.
- Investments destined to research, development and production of electric energy with non-conventional sources will be eligible for a 50% deduction of their income tax.
- Equipment, machinery and services for the production and use of non-conventional sources, as well as the measurement of potential resources and efficient energy management, are exempt from VAT.
Discover other benefits for renewable energies here.
Invest in the hydroelectric potential in Colombia’s energy sector and discover the benefits that the country offers to international investors. Find out more about investing in the country of beauty here.
Related articles
Other documents
