Alliott Global – Client Alert Colombia | 2026 Long-Term Renewable Energy Auction (Renewables & Storage): cross-border entry routes and near-term opportunities

April 25, 2026

Colombia’s Ministry of Mines and Energy has launched a new long‑term energy contracting mechanism, with the auction award process to be implemented no later than 31 July 2026.

Successful participants will enter into Long‑Term Energy Contracts with a 15‑year term starting from the contract obligations start date, under a pay‑as‑bid allocation design and a “take-or-pay‑contract” settlement approach within the wholesale market framework.

Contract pricing is based on the seller’s bid price plus the applicable regulated component (CERE), as provided in the auction rules

What is being auctioned?

The mechanism offers four (4) products differentiated by hourly delivery profile:

Product 1 (Baseload): Flat delivery across 24 hours.
Product 2 (Solar): Delivery aligned to solar hours 06:00–18:00 (12 hours).
Product 3 (Hybrid): Two delivery blocks (day + evening) and participation requires the plant to include a SAEB (battery energy storage system) among its generation assets.
Product 4 (Peak): Flat delivery 18:00–22:00 and energy must be delivered through a SAEB integrated as part of the generation assets.

The contracts will generally start on 1 January 2030. For Product 1, an additional auction will be held for contract starting on 1 January 2035.

Foreign sponsors: practical entry without an existing Colombia presence

For sell-side participation, the rules expressly allow foreign individuals and entities to participate through a Colombian participation structure, including a “company formation undertaking” (promesa de sociedad futura) to incorporate a Public Utilities Company (E.S.P.) domiciled in Colombia, which would assume the rights and obligations of a generator if awarded

Fast-track ways to participate (before 31 July 2026)

Two practical entry routes stand out for sponsors seeking a lighter upfront path into Colombia’s long-term contracting auction

Product 1 with a 2035 start date: a straightforward “platform-entry” option. This track does not require the typical enabling packages at the time of participation, while the project still needs to meet the applicable regulatory steps over the course of development.
“No-permit” projects: for smaller or lower-impact assets, sponsors may also pursue projects that can be supported with an official communication from the competent environmental authority confirming no environmental licenses, permits, authorizations are required.

Quick eligibility screen (minimum scale)

Product 1: participation is available for: (i) new plants (renewables) with net effective capacity ≥ 5 MW; (ii) certain existing renewable plants meeting the applicable conditions, and (iii) new self-generators (autogenerators) with surplus ≥ 5 MW.
Product 2: Reserved for new Solar PV plants and new solar self-generators with surplus, in each case with net effective capacity / surplus ≥ 5 MW

How Peña Mancero Abogados can support Alliott member clients

Auction-entry structuring for foreign sponsors (E.S.P. or “promesa de sociedad futura”) and governance documentation.

Fast eligibility screen identifying the simplest route (Product 1–2035 or “no‑permit” environmental pathway projects and the minimum capacity fit (≥ 5 MW where applicable)
Auction representation as a client counsel and attorney‑in‑fact for filings, platform steps and bid process coordination with the auction operator.
If awarded, support the auction‑operator mandate agreement for centralized contract/guarantee administration and the required market registrations and ongoing energy market compliance to operate and settle under Colombian rule.