Bogota, Colombia

Two recent global reports have highlighted Colombia for its strong business climate and impressive economic improvements, which have made the country increasingly attractive to local entrepreneurs and foreign business and leisure travelers. The World Bank Group and the World Economic Forum both recognize Colombia as being a leader in Latin America.

The World Bank Group’s report, Doing Business 2015: Going Beyond Efficiency, ranked Colombia as the number one country in the Latin American and Caribbean regions for ease of doing business. The report highlights Colombia’s recent successes in the area of regulatory reforms, with 29 business friendly reforms implemented in the region since 2005.

Additionally, Colombia rose three places in the World Economic Forum’s 2014-2015 Global Competitiveness Index, an annual ranking of countries’ productivity levels based upon 12 pillars. Colombia’s ranking was boosted by advances in technological adoption and infrastructure development.The Index also ranks Colombia sixth globally for “strength of investor protection,” topping all other Latin American countries by a wide margin.

Earlier in 2014, Colombia launched the “Colombia Bring IT On” campaign, a major initiative aimed at promoting the growth of the country’s technology sector in the international market and raising awareness around Colombia’s competitive advantages in the industry. Colombia’s IT sector is now the third largest in Latin America, with 33 percent growth over the past five years. In 2013, total sales for the software and IT sector in Colombia exceeded US$3 billion and it is expected that this figure will double by 2018.

Hero-Moto-Corp

Hero MotoCorp announced on Friday that it had begun retail sales in Colombia with six of its motorcycles going for sale in 120 outlets (which are expected to increase to 150).

The bikes that are being sold in Colombia are the Splendor iSmart, Eco Deluxe, Passion Pro, Glamour, Hunk and the Karizma ZMR. Along with these bikes, Hero MotoCorp is offering four-year warranty, which is a first in the Colombian market. The company is also in the process of setting up a manufacturing plant in the region. This plant is spread over 17 acres of land at the Parque Sur Free Trade Zone in Vila Rica. It is expected to be operational by the middle of next year with an initial capacity of 78,000 units. This will go up to around 150,000 units by 2017.

Hero’s plan is to make Colombia a base for expanding its operations to neighboring countries in South America.

Colombia

Talisman Energy Inc.’s affiliate Talisman (Colombia) Oil & Gas Ltd., (“Talisman”) and Ecopetrol S.A. have proven the presence of hydrocarbons in the Nueva Esperanza-1 exploratory well (A2b), located in block CPO-9, Department of Meta, Colombia. Talisman and Ecopetrol are jointly analyzing the results and will file an application with the Colombian authorities to place the Nueva Esperanza-1 well on long-term test (continuous well production going to market at the most recent weekly average. A permit for long term testing is required for a well to produce oil until the permit for full field development has been granted.)

It is the second oil discovery made by Talisman and Ecopetrol in Block CPO-9, following the discovery of hydrocarbons in the Akacias structure in 2010. The Nueva Esperanza structure is adjacent to, and along the same structural trend as, the Akacias Field. Additional exploration wells along the continuation of this trend are planned.

Colombia Best in Latin America

Colombia has been ranked as the best country to do business in Latin America in the 2015 Doing Business report issued by the World Bank in October.  Colombia ranked 34 on a list of 198 economies around the world, nine places higher than last year’s ranking. Last year Colombia ranked third in Latin American countries.

The top five countries in Latin America this year are:

1. Colombia
2. Peru
3. Mexico
4. Chile
5. Panama

This year Colombia outperformed Chile, Peru, Mexico, Brazil and Panama. Positive legislative changes made in the country in the areas of taxes, credit and property regulation helped Colombia to improve its ranking in the region.

I have had the pleasure to live in the country for six years which provided me with the opportunity to learn about the culture and the how to do business in Colombia. This has provided the knowledge to back up my statement above.

Here are a couple of points for your consideration:
1. Hydropower – According to a recent study by the World Bank, 70 percent of Colombia’s power generation is through hydropower. At first glance it seems that this sector is saturated, but the reality is that hydropower energy in Colombia is far from saturated. Accroding to sources from Mining and Energy Planning Unit in Colombia, the current hydropower generation is 9GW and its potential is 90GW a 10X growth potential. In my opinion, small hydropower have the best potential due to the low investment cost and the available terrain for its installation when compared to large hydropowers.

2. Biomass –  This is another area with strong growth potential for biodiesel and ethanol projects. Colombia has great biomass potential that comes from banana, coffee pulp, and animal residues. Energy from sugar cane, which actually produces 31,5 MW, presents the biggest potential given the immense amount of available baggasse (6 m. tonnes/year). According to Biofuels Federation Colombia currently produces 506,000 tons/year of biodiesel and it has a 8X growth potential and the ethanol production is 1.3 million liters/day with a 10X growth potential.

3. Wind – Colombia’s wind power remains largely untouched and it provides greatest potential. Of all South America, Colombia has the best geological conditions to provide stable wind power. Offshore regions of northern Colombia have been classified with class seven winds (winds over nine meters per second). The only other region in South America that has such potential is the Patagonia region of Chile and Argentina. The Guajira Peninsula alone has the potential to generate 21 GW, enough power to provide for the country two times over. However, it currently has an installed capacity of only 19.5MW, just 0.4 percent of its potential.

4. Solar – Another area untapped in this country. In South America, Colombia provides the best solar potential with daily average of 4.5 kWh/m. However, only 6 MW of photovoltaic energy developed. Underdeveloped considering that Colombia´s daily energy potential is 4.5KWh/m.

Colombia potential does not stop at the potential at the national level. Colombia has the potential to become an energy provider to other parts of South America that are currently in need of energy such as Venezuela, Ecuador, and Chile.

Hoegh-LNG Strikes Deal in Colombia

Höegh LNG is a provider of floating Liquified Natural Gas (LNG) services under long-term contracts. The company owns and operates floating storage and regasification units (FSRUs) which act as floating LNG import terminals, and LNG carriers which transport the LNG to its markets.

Höegh LNG Holdings Ltd. has signed a FSRU contract with Sociedad Portuaria El Cayao S.A. E.S.P. (SPEC) for a new LNG import terminal in Cartagena, on the Atlantic coast of Colombia. The contract with SPEC is subject to the Colombian company obtaining necessary environmental licenses for the project, which is expected to start operations mid-2016. The SPEC FSRU contract is for twenty years, but includes options for SPEC to reduce the term to five, ten or fifteen years. SPEC will confirm the initial contract term before start of operations.