Colombia has been pushing to wean its economic system off fossil fuels because it put in its first leftist president greater than two years in the past. But it surely has struggled to maneuver extra into agriculture, tourism, and renewable vitality industries.
“Surely, with a view to substitute the revenues from fossil fuels, the economic system have to be diversified,” says Andrés Camacho, minister of mines and vitality.
President Gustavo Petro’s administration has stopped issuing new oil drilling and exploration contracts and, in December final yr, turned the primary vital oil and coal producer to enroll to the Fossil Gas Non-Proliferation treaty, which promotes the elimination of fossil gas extraction worldwide.
Nonetheless, oil and coal exports nonetheless make up round half Colombia’s export revenues, producing $24.7bn final yr, whereas tourism and agriculture introduced in about $17.5bn. And, although the $7.4bn tourism trade has expanded 12.8 per cent since 2022, it stays a good distance off producing an revenue just like that of fossil fuels.
Some observers have questioned the federal government’s insistence on abandoning extractive industries at a time when oil costs are excessive.
Different South American nations, resembling Brazil and Guyana, are creating fossil gas industries in addition to selling environmental initiatives.
“The very fact is that, defending oil and fuel and defending various energies, doesn’t imply that you simply can’t develop tourism and agriculture on the identical time,” says Juan Carlos Echeverry, a former finance minister and president of state-controlled oil firm Ecopetrol, who’s now a critic of the federal government. “I don’t see that there’s a dilemma, as each issues might be completed, as they’re within the US and Brazil.”
Colombia’s economic system is lagging, with development this yr projected at 1.9 per cent, beneath the IMF’s regional projection of two.1 per cent. 12 months-on-year inflation in September accelerated to six.1 per cent. Petro now plans to problem the nationwide spending plan for 2025 by decree, following an deadlock with lawmakers over price range financing.
In the meantime, agricultural exports are set to extend 8 per cent this yr, the federal government stated in August. The forecast follows a 12.8 per cent decline in 2023. Earlier than that, the sector had seen regular development.
Petro, as soon as a guerrilla member who has typically criticised the nation’s non-public sector, is dedicated to reaching internet zero emissions by 2050 and has stated Colombia ought to export inexperienced vitality.
In 2022, 66 per cent of the nation’s grid was generated by hydropower, 32 per cent by fossil fuels, and a pair of per cent by wind and photo voltaic.
Now, the federal government predicts that by 2027, it will likely be 50 per cent hydro, 26 per cent wind and photo voltaic, and 24 per cent fossil fuels. Vitality minister Camacho notes that 85 photo voltaic farms had been introduced on-line previously yr.
However critics have hit out on the authorities for not working with renewable vitality firms to beat points with native communities.
Enel, the Italian utility, final yr deserted building of a landmark wind farm challenge after failing to succeed in an settlement with native indigenous communities over the land for use for transmission strains.
“Initiatives must be sustainable not solely from a social standpoint however an financial one,” stated Eugenio Calderón, who heads Enel Inexperienced Energy in Colombia and Central America, on the time.
The challenge would have added 205MW of capability to Colombia’s 21GW grid however now sits unfinished in a windy area of the La Guajira peninsula, which juts out from the northern tip of South America into the Caribbean.
Nonetheless, Grupo Energía Bogotá, whose principal shareholder is town of Bogotá, is constructing transmission strains which are anticipated to return on-line in two phases over the subsequent two years, connecting different wind farms to the grid — one thing Camacho says displays classes learnt from the expertise with Enel.
“We’ve got developed a government-to-government dialog with indigenous authorities and have gained a deeper understanding of their customs, their practices, their methods of thought,” Camacho explains. “It is a chance to develop what we’ve got recognized as a good transition.”
Alexandra Hernández, the president of Colombia’s renewables affiliation, says the nation must proceed to diversify its grid, which is susceptible to drought as 70 per cent of vitality is generated in hydroelectric dams.
The federal government has warned of vitality shortages in 2028 if extra initiatives aren’t introduced on-line, with demand projected to outstrip provide by thrice.
“That’s the place renewables are available as a result of they will come on-line a lot faster,” says Hernández, including that the nation shouldn’t shift abruptly away from fossil gas extraction.
“So long as the world continues to eat fuel and oil, it’s pointless for Colombia to sacrifice the lower than 1 per cent of the worldwide oil provide through which it participates.”
Zelestra, a Spanish renewable vitality group, is investing in Colombia, and in September inaugurated a $200mn photo voltaic farm with capability to generate 100MW.
Chiara Gasparrini, the group’s vice-president for enterprise improvement in Latin America, says that modifications to the regulatory framework below the Petro authorities have made it a extra engaging place to put money into renewables than different photo voltaic and wind wealthy nations within the area, resembling Peru and Ecuador.
Approvals can take too lengthy, although. “Typically, the time required for permits . . . isn’t precisely what could be required to make many initiatives viable throughout the timeframe of presidency laws,” she says. “However it’s actually one thing that’s being labored on.”
