S&P Global Ratings affirmed its 'BBB-' long-term foreign currency and 'BBB' long-term local currency sovereign credit ratings on Colombia. The outlook on long-term ratings remains negative. It also affirmed the 'A-3' short-term foreign currency and 'A-2' short-term local currency ratings. The negative outlook reflects the risk that a sharp economic contraction this year and only moderate economic recovery in 2021 could erode the sovereign's financial profile. Weakening of public finances may persist longer than expected, resulting in a downgrade. However, the outlook could be revised to stable within the next 12-18 months if the government undertakes steps to stabilize the economy, sustain GDP growth prospects, and strengthen fiscal policy. After an economic contraction of 8% in 2020 S&P expects a rebound of 5.5% in 2021 and average growth of 4% during 2022-2023. Colombia is likely to regain its pre-COVID-19 output level only by late 2022.
The Colombian government is drafting regulations for offshore wind power generation off the Caribbean coast, as part of efforts to diversify the hydro-dependent energy mix. The government hopes to raise the share of non-conventional renewable power – mainly solar and wind – to 12% of the energy mix by 2022 from less than 1% today. According to energy ministry planning unit UPME, developers have submitted plans for 17 onshore wind projects totaling 2.5GW of installed capacity. The largest are the 378MW Andrea Jusayu (formerly Cerrito) complex and the 325MW Guajira II park, both in the Caribbean coastal department of La Guajira. More than two thirds of Colombia's installed power capacity comes from hydropower with the remainder mostly derived from fossil fuel-fired thermoelectric plants.
Global renewable energy operator Renovatio Group is launching the first private renewable energy auction in Colombia. The auction offers to buy up to 20 GWh per month of green energy for terms up to 25 years. Any nonconventional renewable energy project as defined by Colombia’s Ministry of Mines and Energy according to law 1715 can participate. This includes wind solar, biomass, and small (less than 20MW) hydroelectric projects.
As part of a strategy to boost the mining sector, Colombia plans to hold bidding rounds for copper, phosphate and gold projects. During a presentation at the virtual Latin American Mining forum of organized by RDN Global, Catalina Rueda, promotion manager at national mining agency ANM, said the round for copper projects will be held in January 2021, phosphates in September and gold in early 2022.
President Duque said deforestation in Colombia has been slashed by almost 20% during his first two years in office, speaking in an interview for Reuters Events Responsible Business USA. "We have set the goal of reducing (deforestation) by 50% by the end of our administration," Duque said. Government plans to plant 180 million trees by August 2022 will offset some destruction. This year, some 38 million trees have been planted. In 2018 and 2019 Colombia lost 356,053 hectares, while the millions of new trees are expected to cover some 300,000 hectares. According to the government, deforestation has fallen in part due to policies promoting sustainable use of natural resources, as well as paying thousands of rural and indigenous families to assist in conservation efforts.
Origin Gold signed a definitive agreement to acquire the Otu Central gold project in Colombia from Bullet Holding Corp. Located in Antioquia, the 24,255-hectare project consists of interests in 26 mining claim titles and applications, which the Toronto-based company will wholly acquire for a total of approximately $9.15 million, paid in cash, common shares following the completion of a private placement and common shares issued to Bullet on the one and second-year anniversary of the deal.