Finnfund, a Finnish impact investor, and Proparco, the French development finance institution, have committed a combined USD 33 million to Colombian integrated solar energy platform ERCO, with the investment supported by a guarantee from the European Union.

The investment will support ERCO’s expansion of solar power generation capacity in Colombia, with the objective of strengthening energy security, diversifying the country’s electricity mix and increasing renewable energy availability.

The investment forms part of a larger equity financing round led by an international consortium of development finance institutions and impact investors, with Augment Infrastructure Managers leading the round.

The funds will be used to finance the construction and expansion of solar energy assets in partnership with European clean technology companies and technology providers.

ERCO Targets 1 GWp of Additional Solar Capacity

Founded in 2012, ERCO has developed from a solar engineering and maintenance company into an integrated clean energy platform covering solar project development, engineering and construction, power generation and digital energy retail.

The company has delivered more than 2,000 solar projects to date and is among the leading players in Colombia’s commercial and industrial solar market.

ERCO is targeting approximately 1 GWp of additional solar generation capacity by 2030 as it seeks to support Colombia’s transition toward a more diversified and climate-resilient energy system.

The company also plans to expand its battery energy storage capacity alongside solar generation.

Investment to Support Colombia’s Energy Security

Colombia’s electricity system is heavily dependent on hydropower, exposing the country’s power supply to climate-related events, including droughts associated with El Niño.

At the same time, electricity demand is expected to increase as economic activity and electrification expand.

ERCO aims to address these challenges by increasing solar generation and battery storage capacity, supporting greater grid resilience and reducing greenhouse gas emissions.

Finnfund Senior Investment Manager Ari Nironen said ERCO has established an integrated solar platform with experience across project development, construction, operations and energy retail, adding that the investment will support the company’s next phase of growth.

Proparco Senior Investment Officer Marianne Pallez said ERCO’s local expertise, integrated business model and project execution capabilities position it to respond to Colombia’s growing demand for energy infrastructure.

EU Guarantee Supports Investment

The investment 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, which forms part of the EU’s Global Gateway strategy.

The guarantee is intended to reduce investment risk and facilitate additional equity investment in renewable energy projects.

According to the project partners, EU foreign direct investment accounts for 80% of non-conventional renewable energy generation in Colombia.

François Roudié, Ambassador of the European Union to Colombia, said the partnership demonstrates cooperation between Colombia and the EU in advancing renewable energy, improving power-system resilience and supporting the country’s energy transition.

Focus on Solar and Battery Storage

ERCO plans to use the new capital to accelerate the deployment of solar and battery storage projects while leveraging local financing and recycling capital into additional projects.

Luis Fernando Gómez, Chief Financial Officer of ERCO, said the investment from Finnfund, Proparco and other investors will provide capital to accelerate the company’s growth and expand Colombia’s renewable energy capacity.

The investment is also expected to increase renewable electricity generation, reduce reliance on fossil-fuel-based power generation and help address the risks associated with hydropower variability.

ERCO’s expanding portfolio is expected to provide commercial and industrial customers with access to cleaner and more reliable electricity solutions.

Focus on Inclusive Growth

The investment also includes an emphasis on workforce inclusion. ERCO currently exceeds the 2X Challenge thresholds for female employment and leadership, with women accounting for 26% of its employees and 33% of its managers.

The company has committed to maintaining and increasing women’s participation across its workforce and leadership teams as it expands its renewable energy operations in Colombia.