EDF Renewables quits 145MW Colombian solar project

EDF Renewables has withdrawn from a 145MW solar project in central Colombia amid permitting delays and an "uncertain outlook" in the Andean country, the French multinational said on Thursday. 

In a statement, the company said the decision was based primarily on licensing bottlenecks for the project in Girardot, Cundinamarca department. 

"Due to significant delays in environmental permits and licenses by local entities, EDF Renewables and its partners have decided to withdraw from the Girardot power [project]," the statement reads. 

The Paris-headquartered company was assigned long-term power purchase agreements for the project at an auction for electricity from non-conventional renewable sources in 2021. 

In addition to licensing delays, EDF said the project's viability had been impacted by tax and regulatory changes. 

Besides imposing new levies on solar and wind generators, President Gustavo Petro earlier this year signed a series of decrees that reduce the autonomy of sector regulator Creg and pave the way for the government to modify electricity tariffs.

"This situation has also been a consequence of regulatory and fiscal changes that have occurred since the auction took place," EDF Renewables said. "Among them are the tax reform that impacted the profitability of the projects and [alterations to] law 1715 to promote renewable energies.

"Likewise, the macroeconomic context with increases in interest rates and volatility in the exchange rate have made the process even more difficult.”

Thursday's announcement follows a decision by Italy's Enel in May to indefinitely suspend its 205MW Windpeshi wind farm in Colombia's La Guajira department because of community opposition.

According to renewable energy association SER Colombia, around two thirds of the country’s solar and wind projects due online in 2023 and 2024 are behind schedule. 

EDF Renewables pointed out that developers were yet to bring online a single solar or wind project assigned contracts at Colombian auctions in 2019 and 2021.

"This is not only a competitive disadvantage for the country compared to other nations in the region, but also presents a panorama of uncertainty in the face of the upcoming El Niño phenomenon,” the company added.

The mines and energy ministry did not immediately respond to a request for comment.