ENEL COLOMBIA RENEWABLE ENERGY

The operation is an investment loan concerning the construction of two solar PV projects, Guayepo III and Atlantico, in Colombia.

The aim is to support the development of the European private sector in energy infrastructure and climate change mitigation beyond the Union's borders. By facilitating renewable energy investments in Colombia, the initiative will contribute to advancing climate change mitigation efforts. Additionally, the project will contribute to EU policy objectives with regard to combating climate change and supporting sustainable development, in line with the EIB's climate action lending objectives. The operation will also contribute to the achievement of the Sustainable Development Goals (SDGs), to which both the EU and the EIB are fully committed. In particular, it is expected to support Goal 7, "Ensure access to affordable, reliable, sustainable, and modern energy for all," and Goal 13, "Climate Action."

The project comprises the construction and operation of two large utility-scale solar PV schemes in Colombia. The schemes are part of a wider solar PV cluster of c. 1 GW renewable capacity developed in the Atlántico region, part of which has been supported by the Bank.

The operation supports the EU policy objectives and development of the European private sector in the fields of sustainable energy and climate change outside Europe and is expected to advance several SDGs. The project contributes to the climate and energy priority under the Global Gateway, which promotes the green transformation and commitments of the Paris Agreement on climate change.

The Project has excellent rated economic rate of return and broader social benefits considering the implementation and operation efficiencies achieved by the Promoter and clean/renewable electricity generated at a lower cost than fossil fuel-based alternatives in Colombia. In addition, the project addresses the market failure of negative climate and environmental externalities through the reduction of carbon emissions and air pollution.

EIB financing provides flexible structure and favourable terms tailored to the Promoter's needs and not available in the local banking market, including an extension of tenor well beyond what is available in the market, upfront disbursements, and alignment with the economic life of the assets to be financed.

EIB contribution improves existing standards implemented by the Promoter through provision of advice on environmental and social matters. The EIB's participation facilitates the financing of renewable energy projects by providing long-term funding under conditions that improve the bankability of the initiative.

The Promoter has extensive experience and strong capabilities in the design, implementation, and management of utility-scale renewable energy projects, supported by EIB technical contribution improving the quality of the project. Furthermore, the operation will strength the EU strategic interests in the region as the promoter is an Italian company.

The project will generate environmental benefits by supporting new renewable energy generation capacity that help to mitigate climate change. If the renewable energy plants were located within the EU they would fall under Annex II of the Environmental Impact Assessment (EIA) Directive 2011/92/EU (as amended by 2014/52/EU), requiring the competent authorities to determine whether EIAs are required. Following Colombian national legislation, an Environmental and Social Impact Assessment (ESIA) is required for such projects and has therefore been has been carried out by the promoter. The related processes and their conclusions will be assessed during the appraisal. The project is expected to contribute to climate action and environmental sustainability (CA&ES) objectives, in particular to climate mitigation and pollution prevention.

The promoter shall ensure that the project implementation will be done in accordance with the EIB's Guide to Procurement.