Colombia tweaks rules for first offshore wind auction

Colombia has updated key guidelines related to compliance and concession guarantees for the country's first offshore wind auction. 

Developers must now present either bank guarantees, standby letters of credit or insurance policies that are valid for the entire concession period plus one year, according to bidding documents. 

During the construction phase, the guarantee amount has been set at 10% of the project's estimated capital expenditure. The latter figure, in turn, must represent at least 70% of a reference cost of US$3mn per megawatt of installed capacity, or its local currency equivalent. 

For the energy generation phase, the guarantee can be adjusted based on the project's timeline, using a designated formula. In the initial phase of the permit, the compliance guarantee is set at US$6mn, irrespective of the project's installed capacity. 

The updated guidelines widen the scope of guarantees to include damages for concession rule breaches.

Details of the changes, in Spanish, can be seen in the attachment in the top-right corner of the screen. 

According to the latest bidding terms, developers have until October 28 to express interest in the auction, while a December 20 cutoff has been set for them to nominate the geographical boundaries of their projects.

A preliminary list of qualifiers will be published on November 5 while offers are due on April 24 next year.

The auction will offer 30-year lease agreements for areas in Caribbean waters off the coast of Atlántico and Bolívar departments. The projects must have capacity of at least 200MW.

The energy ministry said last year that it worked with the Danish government's energy agency and the World Bank to create contract models for the projects. 

Colombia has emerged as one of Latin America's most promising offshore wind markets following the publication of a long-term sector blueprint in 2022.

The 217-page roadmap, authored by London-based firm Renewables Consulting Group in partnership with the World Bank and the UK government, says Colombia has the potential for 50GW of offshore wind capacity in the western Atlantic basin.

The document forecasts up to 1GW of installed marine wind capacity by 2030, 3GW by 2040 and 9GW by 2050.