VZCZCXYZ0014
RR RUEHWEB

DE RUEHBO #2176 1691657
ZNR UUUUU ZZH
R 171657Z JUN 08
FM AMEMBASSY BOGOTA
TO RUEHC/SECSTATE WASHDC 3196
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
INFO RUEHBR/AMEMBASSY BRASILIA 8248
RUEHCV/AMEMBASSY CARACAS 0554
RUEHLP/AMEMBASSY LA PAZ JUN LIMA 6272
RUEHZP/AMEMBASSY PANAMA 1866
RUEHQT/AMEMBASSY QUITO 6940

UNCLAS BOGOTA 002176 
 
SENSITIVE 
SIPDIS 
 
WHA/EPSC FOR FCORNEILLE; EEB/ESC FOR MMCMANUS; DOE FOR GWARD 
 
E.O. 12958: N/A 
TAGS: ENRG ECON CO
SUBJECT: COLOMBIA TO BOOST POWER WITH SIX NEW HYDROELECTRIC 
PLANTS 
 
 
¶1. (SBU) SUMMARY: The Colombian government has issued 
contracts for the private construction of six new 
hydroelectric dams that will add almost 3000 megawatts (MW) 
of electricity to the domestic network by 2018.  The 
additional wattage represents a 22 percent increase in 
installed capacity and will require an estimated USD 5 
billion in investment. The GOC expects to eliminate all 
domestic electricity shortages with the new capacity as well 
as export excess electricity to Central and South America. 
END SUMMARY. 
 
¶2. (U) On June 13, the GOC concluded its process to authorize 
six private companies to construct hydroelectric generation 
facilities in Antioquia (Empresas Publicas de Medellin-400 
MW; Pescadero Ituango-1,200 MW); Tolima (Epsa-60 MW); Huila 
(Endesa-396 MW); Caldas (Promotora Miel II-135 MW); and 
Santander departments (Isagen-800 MW).  The first three 
plants (in Tolima, Caldas and Antioquia) should reach 
operational status by the end of 2014 with the remainder 
operational by 2018.  Colombia currently produces 64 percent 
of its electricity through existing hydroelectric facilities 
and expects to increase its capacity by one third with the 
new plants. 
 
¶3. (U) The announcement of the new plants results from a GOC 
strategy launched in 2006 to increase incentives for private 
investment in the electrical generation sector. Private 
generators were attracted to the deal by the GOC's agreement 
to allow generators to charge up to USD 13.99 per megawatt 
hour of electricity produced.  Based on this contract charge, 
generators can finance the significant investment necessary 
to bring the six plants online.  For example, Spanish 
generator Endesa, already Colombia's largest electricity 
producer, has announced it will invest USD 650 million in the 
construction of its new plant in Huila Department expected to 
begin operations in 2015. 
 
¶4. (SBU) With this new hydroelectric capacity, the first new 
construction contracts in eight years, Ministry of Mines and 
Energy Director of Electrical Generation Edilberto Munoz told 
us Colombia would eliminate electricity shortages that have 
periodically affected the country since the 1990s.  Munoz 
also said Colombia hopes to become an exporter to Central 
America (through interconnection with Panama) and South 
America (through Ecuador to Peru and Bolivia).  Maria Zulema 
Velez, President of the Colombian Association of Energy 
Generators (ACOLGEN), told us she considered the six new 
plants essential for lowering energy costs for Colombian 
industry and predicted that the new facilities would produce 
electricity at a price low enough to compete with Brazil in 
exporting to neighboring South American countries. 
BROWNFIELD