EPM Secures $348.69 Million USD From France’s AFD in Third Credit Deal

EPM’s third AFD loan brings a first-of-its-kind rate incentive

Empresas Públicas de Medellín (EPM) signed its third credit agreement with the French Development Agency (Agence Française de Développement, or AFD) on September 11, 2026, securing $348.69 million USD to help finance the utility’s investment plan for its water, energy and wastewater businesses. The credit runs 15 years with a three-year grace period, and EPM said that, for the first time in Colombia, AFD will apply a mechanism that lowers the interest rate if the borrower outperforms sustainability indicators agreed in the contract.

The proceeds are earmarked for EPM’s broader investment plan, which the company says prioritizes climate-change mitigation and adaptation, renewable-energy development, protection of water resources and biodiversity, expanded access to public services and gender-equality initiatives. EPM said the financing will accelerate infrastructure expansion, modernization and maintenance projects concentrated in its Water Provision, Wastewater Management, and Energy Generation, Transmission and Distribution businesses.

“These resources will allow us to continue modernizing our infrastructure, strengthen our systems’ capacity to respond, and ensure the continuity of services that contribute to the well-being and development of the territories.”

— John Maya Salazar, general manager of EPM

The loan is priced at Term SOFR plus a margin, according to EPM. Term SOFR is a forward-looking rate based on the Secured Overnight Financing Rate (SOFR), which the Alternative Reference Rates Committee recommended as the replacement for US dollar Libor. AFD said the loan is senior debt, with disbursements linked to EPM meeting sustainability indicators, and that the agreement rewards EPM’s performance through a reduction in the interest rate.

“This partnership reaffirms our support for EPM as a benchmark for sustainable development in Colombia and Latin America, combining financing, technical cooperation and international standards that make it possible to generate verifiable environmental and social impacts aligned with the strategic challenges of the company and the country,” said Lorena Chara, AFD’s country director in Colombia.

EPM said that, as is customary in AFD operations, the financing also includes technical-cooperation resources, directed at three areas:

• Strengthening EPM’s technical capacity in sediment management and reservoir “flushing” operations at its hydroelectric plants, aimed at improving the efficiency, safety and sustainability of that infrastructure;
• Adapting international experience in modernizing and securing water-distribution networks, digitalizing public services, innovation and developing “smart territory” projects; and
• Building a corporate framework for prioritizing voluntary environmental investments based on measurable environmental and social impact.

The cooperation builds on a technical mission to Paris, Angers and Nantes on March 8–14, 2026, which EPM said was carried out under the then-pending third credit. “The technical exchange with French institutions and companies leaves us with lessons that strengthen our capabilities and help us keep making informed, responsible, long-term decisions, always with the goal of providing more efficient, safe and reliable public services for the communities and territories where we operate,” said Alejandro Escudero Sañudo, head of water and sewerage information management at EPM.

The September 11 signing is EPM’s third credit operation with AFD. The first, in August 2012, provided $338 million USD for power generation, transmission and distribution projects along with gas infrastructure. The second, signed March 16, 2023, and previously reported by Finance Colombia, provided $189.8 million USD over 10 years, including a three-year grace period, priced at SOFR plus a spread, to partly finance water, sanitation and energy investments including photovoltaic generation, efficiency improvements in transmission and distribution networks, rural electrification and street lighting, according to EPM. Combined, the three operations total $876.49 million USD in AFD financing for EPM since 2012.

EPM said it expects to reach carbon neutrality in its Generation and Transmission and Distribution of Energy businesses in the second half of 2026, with its remaining business lines and support areas following in 2027. The company ties that push to United Nations Sustainable Development Goals 6 and 7, covering clean water and sanitation and affordable, clean energy, and to its commitments under the Paris Agreement.

EPM, founded in 1955, is wholly owned by the District of Medellín and provides electricity, piped natural gas, and water and sanitation services. The company says it serves 21.11% of Colombia’s electricity demand and operates 25 hydroelectric plants, and the EPM Group reported 2024 investments of $5.6 trillion COP in projects aimed at improving public services for more than 9 million people. Its largest asset under construction is Hidroituango on the Cauca River, which EPM describes as Colombia’s largest power-generation project. As of December 2025, four of the plant’s eight 300-megawatt units were running; units five through seven were scheduled to start in the second half of 2027 and the last unit in the first quarter of 2028, according to El Colombiano.

AFD Group is France’s public development-finance institution, active in Colombia since 2009. It operates through three units: Agence Française de Développement handles public-sector financing; Proparco finances private-sector investment; and Expertise France provides technical cooperation. The group says it has more than 4,000 projects aligned with the UN’s Sustainable Development Goals.

Headline photo: An aerial view of EPM’s La Ayura water-treatment plant during its expansion. (Photo courtesy EPM)