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Energy Sector in Bogota

Due to the recent worldwide oil price drop crisis, foreign direct investment in related services has declined significantly. Other energy related investment opportunities are arising.

The price of energy in Colombia is highly dependent on weather conditions, there is an opportunity for reducing price volatility by increasing non-conventional energy supply.

Find the next information about the sector:

 

Market energy prices vs aggregated water reservoirs in Colombia 

Source: UPME-2015. Integración de las energías renovables no convencionales en Colombia. CONVENIO ATN/FM-12825-CO

 

The source energy supply portfolio in Colombia is poorly diversified, there is a current necessity for other sources of energy

Applicable Regulation 

142 Act and 143 Act from 1994

·       Applicable regulation for energy generation and commercialization

1715 Act from 2014

·       Renewable energy integration into the National Energy System

2143 Act from 2015

·      The explanation and application requirements in order to access incentives created by chapter III 1715 act of 2014

 

Tax Benefits

Tax Benefits – Income TAX Deduction

Any Production and efficient usage of renewable energy sources. Capex and R&D

Requirements:

  • Renewable energy new investments, new projects and efficient use of energy approved by UPME
  • Previous approval of the environmental benefit certificate by the Ministry of Environment – ANLA

 

Tax Benefits – VAT Exemption

For new investments and pre-investment for production and efficient usage of renewable energy. Destined for evaluation and measurement of potential resources.

Requirements:

  • Goods and services must be included in the UPME  045 resolution of February 4th 2016
  • Previous approval of the environmental benefit certificate by the Ministry of Environment – ANLA
  • Renewable energy new investments, new projects and efficient use of energy approved by UPME

 

Tax Benefits – Tariff Exception

Imports of resources related to machinery, equipment, materials and supplies used exclusively for pre-investment and new investment of renewable energy activities.

For new investments and pre-investment for production and efficient usage of renewable energy

Destined for evaluation and measurement of potential resources.

Requirements:

  • Previous approval of the environmental benefit certificate by the Ministry of Environment – ANLA
  • Renewable energy new investments, new projects and efficient use of energy approved by UPME
  • Send to the one-stop trade office (VUCE) – the request for prior license appending both certificates  
  • Tariff exemption must be requested to DIAN in a minimum if 15 days before the import is done
  • Goods and services must be included in the UPME  045 resolution of February 4th 2016

 

Tax Benefits – Accelerated Depreciation

Applicable for machinery, equipment and construction necessary for pre-investment, investment and operation of the renewable energy generation activity.

Requirements:

  • Previous approval of the environmental benefit certificate by the Ministry of Environment – ANLA
  • Renewable energy new investments, new projects and efficient use of energy approved by UPME
  • Hold a position of energy supplier using renewable sources with new investments being made after approval of 1715 Act of 2014 

 

Opportunity Understanding 

  • The regulatory frame work for the development of renewable energy sources in Colombia is ready
  • National government is committed to adopt serious action in order to suppress entry barriers to the production of renewable energy (part 41 of 1715 Act)
  • New renewable energy supply is an important alternative for the energy challenge Colombia is facing now.
  • Renewable energy production is a great opportunity for Colombia's economic development in matters of investment, employment, new technology and research production

Recently, Bogota has positioned itself as an important hub for the energy sector in Latin-America, thanks to the growing production activity in the O&G sector since 2003, the abundance of hydroelectric potential and the recent institutions regulating unconventional energy distribution in Colombia have created an attractive business environment.  

 

Why locate in Bogota?

  • Top energy players like Enel are rapidly arriving to the scene.
  • Strong economic performance, stable policies, and significant institutional support for energy sector have generated a favorable environment for new investors.
  • Bogota has a skilled and experienced work force for this industry, concentrating 39% of graduates in careers related to the business.
  • The cost-benefit ratio with regard to salaries and infrastructure is one of the most competitive in the region.
  • Bogota has positioned itself as a regional hub for northern South America, Central America, and the Caribbean for investing in the energy sector serving all the regions.

 

What investors are saying

"We are a medium sized company that operates in the High Voltage Electrical Transmission Lines and Substations. Some time ago we were invited by the ENEL Group from Italy to participate in tenders held in Colombia by Codensa and other Electrical Companies that are part of the Group. In our first visit to Bogotà we came in touch, following a recommendation by the Italian Embassy, with Invest in Bogotá. We must say that Invest in Bogotá, with its team of highly motivated professionals, was fundamental to quickly get in touch with all the economic players we needed to get in touch with in order to establish our venture in Bogotá. Furthermore, we found in Bogotá an incredibly friendly economic environment making us feel right at home doing business here. Bogotá is a very thriving city and a great market where you can find everything you need for your business."

Enrico Fanfani
General Manager of Consalt International

 

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Updated (mm/dd/aaaa): 09.28.2016