Colombian authorities highlight business opportunities in energy, infrastructure, tourism and new technologies

The Minister of Transportation, Ángela María Orozco, and the Deputy Minister of Energy, Miguel Lotero, reported on the Colombian Government’s progress in both sectors.

Colombian government officials today highlighted the business and investment opportunities in key sectors of the country, during the second and final day of the Colombia Investment Roadshow, which was being held for the first time in Spain, specifically at the headquarters of the CEOE. In the course of two simultaneous sessions, one focused on the infrastructure and energy sectors, and the other on new technologies, the orange economy and tourism, top-level experts, representatives of the Colombian Government, multilateral institutions and companies, discussed progress made in these areas and the reforms that have been instituted in Colombia in recent years.

Coinciding with the celebration of ProColombia’s 30th anniversary, this event, organised by ProColombia and the CEOE, in collaboration with the Secretary of State for Trade through ICEX and the Spanish Chamber of Commerce, and with the support of BBVA, is an excellent business platform for international and Colombian companies. Following yesterday’s inauguration, projects in specific sectors were presented today, and stakeholders held one-to-one virtual meetings with local companies, representatives of public-private bodies and national and regional governmental institutions.

Infrastructure and energy: two pillars of growth in Colombia

The Colombian Minister of Transport, Ángela María Orozco, and the Vice-President of the CEOE and President of the Institute of Economic Studies, Íñigo Fernández de Mesa, opened one of the conference sessions held today at the CEOE, which focused on the great potential of infrastructure and the energy sector in Colombia. 

Fernández de Mesa introduced the Minister by stressing that the attraction for foreign investors is that Colombia has very strong institutions and great regulatory stability, as well as being a country offering good opportunities for long-term investments. He also highlighted the fact that Colombia became the second Latin American country to issue sovereign green bonds; and the first to do so in local currency, which ensures that investors will continue to bet on this destination for their businesses. To further strengthen our bilateral relations, the Vice-President of the CEOE recalled that, on his trip to Bogota last week, a Spanish-Colombian Business Council was founded, led by the CEOE and ANDI, which seeks to be a tool for private cooperation and with a clear objective: to contribute to increasing expanding business, trade in goods and services between the two countries, and reciprocal investment in third markets.

The Minister of Transport, Ángela María Orozco, in turn, said that Colombia is the second-ranked country by economic growth thanks to the Iván Duque’s Government’s reactivation plan. “We have built on what had been built,” he stressed, and referred to a major package of projects that had been awarded and were stalled just four years ago. To make this possible, he pointed out, all parties sat down for dialogue, and organised at State level through an Intersectoral Committee to seek solutions for the recovery. Orozco stressed that the private sector is a key driver in closing the connectivity gap in the country and which, she stressed, has been instrumental in bringing communities into the process. “Thanks to the business sector, there have been historic implementation rates and, although it has not been easy, it has created confidence. The private sector is, without a doubt, a strategic ally in the development of the country,” she stated.

To further explore the question of infrastructure, the Minister herself and a series of experts spoke on a panel focused on progress and prospects for transport in Colombia, and on strengthening the structuring of infrastructure projects and their financing mechanisms in that country.

In this respect, the President of the National Infrastructure Agency, Manuel Felipe Gutiérrez; the Vice-President of Structuring of the National Development Finance, Rafael Herz; the Global Head of Structured Finance at BBVA Corporate & Investment Banking, Jaime Artola; the Vice-President of the CEOE, Íñigo Fernández de Mesa; and the Europe, Asia and Middle East manager of the Development Bank of Latin America-CAF, offered their views on the development of infrastructure in the country, at a round table moderated by the CEO of the Asociación Empresarial Eólica-AEE, Juan Virgilio Márquez.

The Minister for Infrastructure, Ángela María Orozco, highlighted the fact that between 2018 and 2022, significant construction progress has been made on concession projects and 27 of the 29 projects are performing very well. She further reported that six 4th generation projects have been delivered to date and that 13 are still pending and will be delivered by August 2022. “It is essential that there is social connectivity to make the necessary reforms, otherwise the projects will not work,” Orozco explained. In terms of progress on public works, the Minister highlighted the building of new roads, tunnels, maintenance and restoration of the primary network; and reported investment in road infrastructure (US$15.5 million) and the railway network (US$1.1 million). This year, 40 public works projects will be delivered, she pointed out. Regarding the 5th generation of concessions, he underlined that there are 14 projects worth 5.92 billion dollars, which have already generated 600,000 jobs so far. She also mentioned the projects with “Cofinanciación Nación,” which are partly financed by the state and four of which are now underway, including the first metro line in Bogota.

For their part, the experts taking part in the panel highlighted the importance of legal stability, rigour and risk structuring and, above all, the availability of financing. In this sense, Íñigo Fernández de Mesa, deemed it crucial “to comply with contracts, to promote legal stability and to generate credibility. And the latter is very important, since if a country loses credibility in long-term projects, it is very difficult to recover. Jaime Artola, in turn, highlighted two basic aspects of the field of infrastructure: “obtaining liquidity to move forward with projects and achieving competition.” 

For CAF, Ignacio Corlazzoli insisted on the importance of adding sustainability to projects, seeking to raise standards and supporting projects from the beginning. Rafael Herz stressed that, to continue to invest in infrastructure projects, it is key to promote public-private partnerships, to clearly distribute risks and to invest in social projects, such as water and basic sanitation, smart cities, etc. Manuel Felipe Gutiérrez assessed Colombia’s process of institutional maturity and insisted that, if the projects are robust, they should continue to be promoted regardless of the government in power, since they are “state projects” and the effort must continue.

Green hydrogen: a bet on the future

In a second panel, focused on energy, the Colombian Deputy Minister for this sector, Miguel Lotero, highlighted some of the reasons the Latin American country is a clear leader in this field. In this respect, he reported that, when he arrived in government, the priority was to design a regulatory framework adapted to and supportive of the sector. This is why the Energy Transition Act was passed: it aims improve storage systems, promote green hydrogen, geothermal energy, incentives for carbon capture, use and storage, smart metering, extension of VAT and tariff exclusion benefits, and accelerated depreciation of Efficient Energy Management. Moreover, he stressed, all this was complemented by preparing a National Development Plan, complemented by the Financing Act.

To support all these measures, Lotero pointed out, the Energy Transformation Mission was implemented; the Fuel Gas Act; the Climate Action Act; the CONPES, whereby the initiatives undertaken by this government to achieve carbon neutrality are now state policy; and the Green Taxonomy: Colombia is the fourth country in the world, and the first in the region, to have this initiative. As of 2018, the Deputy Minister reported, there were was an installed power of 756MW, a 27-fold increase on the capacity of four years ago; and there are 2,611 MW under construction. Lotero explained that “this government has made history by launching the first two pilot projects for green hydrogen generation in Colombia.” There are exceptional renewable resources, abundant coal and natural gas reserves to produce low-emission hydrogen and a prime export location, he said. Furthermore, according to the Deputy Minister, geothermal energy has arrived and will further diversify the energy matrix; Colombia is also leading the race for sustainable mobility; and the path to zero carbon emissions has begun, thanks to the update to the Comprehensive Climate Change Management Plan for the mining and energy sector, marking the road towards carbon neutrality and climate resilience by 2050.

In two round table discussions, leading experts from institutions and companies assess the transition towards decarbonisation and diversification of the energy matrix, thanks to clean energy and new technologies, as well as energy solutions in isolated regions. The panels moderated by Juan Virgilio Márquez, the CEO of AEE and Juan Carlos Villena, the Deputy Director of the Development Partnerships Area at COFIDES; Guilherme de Mendonca, the CEO of Siemens Energy in Colombia; Ernesto Gutiérrez, the Vice-President of Digital Ecopetrol; Javier Brey, the Executive President of the Spanish Hydrogen Association; Marco Sanjuan, the Innovation Manager at Promigas; Marco Antonio Morales, the Director of Development in Latin America at Enerfín; Juan David Insuasti, the Director General of IPSE; and César Martín, the Head of Sustainable and Inclusive Business Sector at ICEX.

The experts agreed that the situation has shown us that we were not prepared for what was coming, and that it is essential to provide rapid measures and responses. For his part, Guilherme de Mendonca, highlighted “Colombia’s great potential as an exporter of green hydrogen,” and Javier Brey pointed out that “when this hydrogen really has to be exported and the projects arrive, countries must be ready; that is why Colombia is setting an example, creating pilot projects and seeking local industry.” Ernesto Gutiérrez, in turn, stressed that “Colombia offers a very interesting portfolio for the energy transition, with green hydrogen one of the most viable alternatives.”

Other areas for the future of Colombia: new technologies and tourism

BusinessEurope CEO Luisa Santos presented the day’s second parallel session, which focused on other key areas for the future of Colombia, such as new technologies, the orange economy and tourism. In her presentation, the European representative explained that, in the current context, marked by an economic recovery after the Covid crisis, Russia’s invasion of Ukraine and the rise in energy and food prices, companies are subject to uncertainty and must think very carefully about what and where they are going to invest. Against this backdrop, companies are seeking stabler countries, with the possibility of growth and diversification, which is why they are thinking of Colombia and the Latin American region in general.

BusinessEurope, Santos stressed, believes that the way out of the crisis is to promote trade and investment, and this must be done abroad, in third countries. To drive these areas, trade agreements are essential, as in the case of Colombia, but given the current situation, it is necessary to bear in mind factors that are increasingly at the forefront and which are essential when it comes to investing, such as sustainability, new technologies, digitalisation and the orange economy. “Europe has a lot of technology and know-how and Colombia has a young and qualified workforce and great potential for growth, so strengthening our relations is a necessity,” he stressed. Finally, Santos mentioned the “Global Gateway,” which aims to mobilise investments of up to 300 billion euros between 2021 and 2027 from the EU, member states, European financial institutions and national development finance institutions. The objective is to invest in developing countries, to create more “Team Europe” and to promote public-private partnerships.

New technologies, the orange economy and tourism: sectors with great potential

In the first panel of the session, focused on new technologies and the orange economy, the president of “Colombia Productiva,” Camilo Fernández de Soto, gave a general presentation on the process of digital transformation in Colombia; this was followed by a round table discussion on the opportunities open to European companies in the process of technological development and entrepreneurship in Colombia. To further explore this topic, besides Camilo Fernández de Soto, the founding partner of Beta Angels (now BAMCAP), Roberto Saint Malo, spoke on a panel moderated by Carlos Abella, the Secretary General of the Spain-Colombia Council Foundation.

The speakers on this panel, including Carlos Abella (the moderator), put special emphasis on Colombia’s great capacity for entrepreneurship, which stands out above the average of countries in the region. They also agreed that the volume of venture capital operations in Colombia has risen considerably. This is due in large part to market growth and increased legal certainty in the country, which is a clear incentive for foreign investment. Experts said that operations of this type in Colombia play a decisive role, given the country’s strong start-up ecosystem.

Tourism: a key area in the Colombian Government’s strategy

The Tourism Doing Business Guide to Investing in Colombia was presented on the second day of the Colombia Investment Forum. The presentation was given by Natalia Bayona, the Director of Innovation, Education and Investment at the World Tourism Organization. The guide set out four blocks of differentiated information. The first concerns the region’s economic development. The data show Colombia’s security and economic stability, which make it a fundamental ally in expanding the tourist sector. The World Bank projects growth of more than 4% for the country, well above the regional average. 

The second block was oriented towards incentives for tourism. Tax incentives are not the only incentives the country offers. Colombia has the most modern tourism sustainability law in the world and the only one in Latin America. Furthermore, the guide details Colombia’s innovation data, with Colombia being the most innovative country in tourism, having spent 1.5 billion dollars on innovation. 
Finally, the document includes a section on investment projects. Colombia makes its investments tangible by presenting a whole portfolio of projects available to interested investors, and the guide, which will soon be available on ProColombia’s website, provides a QR code for each project to give investors easy access to information. 

Subsequently, at the round table “Future and perspectives of tourism: Innovation and investment as axes of development of the sector,” with Enrique Sarasola, the President and founder RoomMate Hotels; Juan Cierco, Corporate Director Iberia - IAG Group; Enrique Martínez Marín, the President of Segittur, and was moderated by Inmaculada Benito, the Director of Tourism, Culture and Sport at the CEOE. 

During the debate, the speakers stressed that, in response to the challenges of the post-COVID era, a “back to basics” approach is necessary in this new phase. It is important not to lose sight of hospitality and the significance of human capital in undertaking tourism operations by personalising the tourism experience. In addition, aspects such as the importance of assessing sustainability in the round were addressed, bearing in mind the social, environmental, economic, security and talent spheres, as key areas for achieving destinations based on value and not quantity. 

Iberia stressed the importance of treating rigorously the data provided about the externalities that tourism has on the environment. “Only 2.4% of the emissions into the atmosphere are produced by the aviation sector,” said Juan Cierco. A new order of measurement, with greater rigour, and adapted to the more uncertain, emotional and vulnerable times we live in, were among the guidelines Enrique Martinez stressed should govern public policies. It is key to place technology at the service of companies and destinations to accompany the ecosystem on this journey towards capturing value. Enrique Sarasola, for his part, referred to cinema and tourism, and he highlighted how the essence of places can be made known through cinema, using Colombia as an example. He also stressed that sustainability in Colombia “is education” and, therefore, one is not born with it. 

Finally, Sarasola alluded to the importance of human sustainability: “all of ROOM MATE’s employees will have an extra week of holiday per year,” and he invited all employers to calculate the impact that such a measure could have on their companies. Improving the social sustainability of the business is undoubtedly beneficial for productivity, he said. In conclusion, the moderator of the round table, Inmaculada Benito, praised integral sustainability in 5 areas: social, economic, environmental, security and talent; and she also stressed the migration from public-private to private-public partnership, whereby companies contribute the value of market knowledge, so that they improve their profitability and, therefore, provide greater well-being. 

All the speakers agreed to point out “Colombia is an example of public policies for promoting tourism.” The debate was not missing a demand for recognition of the tourism sector in Spain’s economic strategy, where it does not yet feature, recognising the efficiency that the ERTEs have offered for maintaining employment, which, besides social balance, is encouraging a faster resumption of business.