10.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	0.0
Equity	10.0

* These investment figures are indicative

Project-level Outcomes- The Project is expected to improve energy affordability to end-users as large utility companies tend to charge undifferentiated rates or capacity charges to their clients. On the other hand, retailers tend to provide customized offers, which can initiate a change in consumption patterns such as higher off-peak consumption. Off-peak consumption reduces the need for total peak capacity in the country, eventually decreases the need for standby thermal plants, and thereby reduces the associated charges included in end-user tariffs. IFC also expects the Project to support the country's climate mitigation agenda by improving access to cleaner energy more competitively and efficiently, thereby displacing high polluting, inefficient, and more expensive thermal generation and hence reduce associated carbon emissions. Contribution to Market Creation- IFC's support to Vatia is expected to demonstrate energy retail companies like Vatia (beyond the incumbent large utility companies) can act as off-takers to renewable energy projects outside of the auction schemes, providing competition on price and service quality on the customer side, while reconciling the long-term certainty needs of renewable energy developers with the short-term certainty needs of end-customers. This is expected to promote renewable energy penetration and hence contributing towards the country's energy supply diversification.

Financial Additionality- IFC is providing an equity investment and a syndication of a senior debt from local banks to Colombian energy retailer/aggregator to support its investments in acquiring solar power plants, debt refinancing, and provide capital to increase its trading and commercialization activities. IFC's involvement will provide financing that is not readily available in a domestic market given the relatively nascent business model. Non-Financial Additionality- IFC will ensure the adoption of corporate governance and environmental & social ("ESG") practices in line with IFC Performance Standards.

This is a category B project according to IFC’s Policy on Environmental and Social Sustainability because the Environmental, Social and Health & Safety (ESHS) impacts related to the investment are limited, site specific, covering the footprint of existing brownfield assets, and the associated environmental and social (E&S) impacts of the new assets can be managed through the implementation of appropriate mitigation measures. IFC’s review did not identify any significant adverse impacts or high-risk exposures.

Key E&S risks and issues for this project include adequate development and implementation of a comprehensive EHS and social management system; contractors E&S management; labor standards, adequate land acquisition practices; worker rights, and implementation of occupational health and safety (OHS) measures; adequate management of air pollution, hazardous materials, solid and hazardous wastes, wastewater; and emergency preparedness. 

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.