Colombian Government Intervention in Caribbean Electrical Grid Risks Destabilizing National Electrical Supply

Government intervention in the Colombian electricity distribution company Air-E has increased accumulated balances, raising concerns about potential credit profile weakening across the energy chain, including generation, transmission, and distribution companies. According to Fitch Ratings, the intervention has introduced uncertainty regarding Air-E’s capacity to meet its financial obligations, which totaled approximately $2 trillion COP ($470 million USD) as of April 2025. A significant portion of this amount is owed to thermal generators.

A government directive prohibiting penalizing Air-E for payment delays by limiting supply compounds the situation. Several rated entities hold significant exposure to Air-E. TermoCandelaria Power S.A. (BB/Positive) has an outstanding balance of around $102 million USD with Air-E, with over half of this incurred since the intervention. Fitch anticipates a reduction in TermoCandelaria’s exposure as normalized hydrology conditions are expected to shift the company back to primarily out-of-merit generation.

Interconexion Electrica S.A. E.S.P. (BBB/Negative) and Grupo Energia Bogotá S.A. E.S.P. (BBB/Negative) also face exposure, with provisions made post-intervention of close to $40 million USD and $12 million USD, respectively, predominantly within their transmission operations. Air-E owes Empresas Publicas de Medellín E.S.P. (BB+/Negative) approximately $38 million USD, of which around $7 million USD is owed to its distribution subsidiary, Afinia. While Fitch does not foresee immediate liquidity concerns for these companies due to their strong cash flow generation, prolonged payment delays could exert pressure on future working capital requirements.

Air-E, which serves roughly 1.2 million users in Colombia’s Caribbean region, accounts for 11.5% of the nation’s total energy demand. The Superintendencia de Servicios Publicos intervened in the company in September 2024, citing financial instability stemming from high energy losses, low collection rates, and considerable exposure to the energy spot market amidst rising prices.

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