Finnfund and Proparco invest USD 33 million in ERCO to accelerate Colombia’s clean energy transition with support from the European Union

Finnfund, a Finnish impact investor, and Proparco, France’s development finance institution, complemented with a guarantee from the European Union, have committed USD 33 million to ERCO, a leading Colombian integrated solar energy platform. The investment will support ERCO’s ambitious expansion of solar power generation capacity, helping strengthen Colombia’s energy security, diversify its electricity mix and increase the availability of renewable energy across the country.

The investment is part of a larger equity financing round led by an international consortium of development finance institutions and impact investors and led by Augment Infrastructure Managers. The funds will be used to finance the construction and expansion of solar energy assets that are expected to contribute significantly to Colombia’s renewable energy capacity growth over the coming years, in partnership with European clean technology companies and solutions.

“Colombia has enormous potential for renewable energy, and expanding solar generation is essential for building a more resilient and reliable power system. ERCO has established itself as a leading integrated solar platform with a strong track record in project development, construction, operation and energy retail. We are pleased to support the company’s next growth phase and its contribution to Colombia’s clean energy transition,” said Ari Nironen, Senior Investment Manager at Finnfund.

“At Proparco, we see ERCO as uniquely positioned to capitalize on Colombia’s growing demand for energy infrastructure. Its combination of local expertise, an integrated platform and a proven ability to execute provides a strong foundation for continued growth. We look forward to supporting ERCO as it expands its platform, scales impact across Colombia and contributes to the country’s long-term energy security,” said Marianne Pallez, Senior Investment Officer at Proparco.

This project is supported through EDFI Renewable Energy Transition (RET), a guarantee managed by EDFI Management Company under the European Fund for Sustainable Development Plus (EFSD+) programme, a part of the EU’s Global Gateway strategy. This guarantee will help reduce the investment risk and unleash new investment for equity. EU foreign direct investment is responsible for 80% of non-conventional renewable energy generation in Colombia.

“The EU is a natural ally for Colombia in advancing its energy transition, greening power generation and building a more competitive, resilient and secure energy system, capable of responding to challenges such as El Niño and geopolitical crises. We are proud to support a European DFI investment in an emerging Colombian company such as ERCO, partner of the European clean-tech ecosystem, using an innovative guarantee tool that enables investments for renewable energy projects. It is a powerful example of how Colombia and the EU can build a virtuous partnership around the energy transition”, said François Roudié, Ambassador of the European Union to Colombia.

Founded in 2012, ERCO has evolved from a solar engineering and maintenance company into a fully integrated clean energy platform combining solar project development, engineering and construction services, energy generation and digital energy retail. To date, the company has delivered more than 2,000 solar projects and is one of Colombia’s leading players in the commercial and industrial solar market.

Colombia’s electricity system depends heavily on hydropower, making it vulnerable to climate-related weather events such as droughts associated with El Niño. At the same time, electricity demand is expected to continue growing as the economy expands and electrification increases. ERCO aims to help address these challenges by scaling solar generation and battery energy storage capacity, improving the resilience and stability of the country’s energy system while reducing greenhouse gas emissions.

The company is targeting approximately 1 GWp of additional solar generation capacity by 2030, supporting Colombia’s transition toward a more diversified and climate-resilient energy mix.

“The confidence of Finnfund, Proparco and our investors gives us the capital to accelerate Erco’s current phase of growth. This investment will support the deployment of solar and battery storage capacity in Colombia, while strengthening our ability to leverage local financing and rotate capital into new projects, expanding Colombia’s renewable energy capacity while generating meaningful social, environmental and productive impact across the country,” said Luis Fernando Gómez, Chief Financial Officer of ERCO.

The investment is expected to generate significant climate impact by increasing renewable electricity generation while reducing dependence on fossil-fuel-based generation and helping mitigate the risks associated with hydropower variability. In addition, ERCO’s growing portfolio is expected to support industrial and commercial customers with access to cleaner and more reliable energy solutions.

The investment also supports inclusive growth. ERCO currently exceeds the 2X Challenge thresholds for female employment and leadership, with women representing 26% of employees and 33% of managers. The company has committed to maintaining and strengthening women’s participation across its workforce and leadership teams.

More information: Ari Nironen, Investment Manager, Finnfund, ari.nironen@finnfund.fi, +358 40 547 8848
Media contact: Valpuri Mäkinen, Communications and Marketing Manager, Finnfund, valpuri.makinen@finnfund.fi, +358 50 384 2105