March 6, 2025
Norfund has increased its investment in Erco Energía with a USD $20 million subordinated loan. The total investment of USD $50 million will create jobs and provide electricity through developing and constructing solar projects in Colombia.
Norfund’s investment also plays a catalytic role by attracting a leading national financial institution to provide senior debt financing, further expanding Erco Energía’s access to capital, which is a critical barrier to reach net zero emissions in the region by 2050.
64% of Colombia’s electricity comes from hydro power, and droughts and more unstable weather as a result of climate change, means a more diverse energy mix is important also for energy security. According to Colombia’s energy plans, the share of solar energy in the energy mix is projected to range between 10% and 21% by 2037, while it only accounted for 1.2% of electricity generation in 2023.
“Since before our initial investment the team and achievements of Erco have impressed us. We are excited to increase the number of jobs and access to renewable energy through this investment”
Arnoldo Morice, Senior Investment Manager in Norfund
With over 12 years of experience in the sector, Erco Energía has played a key role in integrating renewable, cost-efficient, and digital energy solutions in Colombia. To date, the company has developed projects totaling over 323 MW from small to bigger scale, and it is targeting 1 GW of installed capacity by 2030.
Since 2023, Erco has increased the number of permanent positions with 613 and provided more than 2000 temporary jobs. To make sure the communities nearby the facilities benefit, local workers have been given specialized training in construction and maintenance.
“A well-executed social engagement strategy transforms solar projects from being just energy investments into catalysts for community growth and empowerment. By ensuring alignment with local needs and aspirations, developers can achieve greater acceptance, long-term project sustainability, and a positive social and environmental legacy.” says Luis Fernando Gómez, Chief Financial Officer of Erco.
In the projects in Guamo, Numbana, Rokra and La Martina the company has identified key stakeholders and explained each development phase, highlighting benefits, addressing concerns, and encouraging active community participation. Projects such as integrating natural vegetation control with livestock, donating solar-powered streetlights for safer roads, and providing school kits and tablets to students have contributed to secure local support.