Ecopetrol Borrows $700 Billion Colombian Pesos From Banco Davivienda

Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC), Colombia’s state-controlled oil company, announced it has secured authorization to enter into a domestic loan agreement for up to COP 700,000 million with Banco Davivienda. The authorization was granted by the Ministry of Finance and Public Credit (Minhacienda) through Resolution 2691, dated October 21, 2025.

The transaction is structured as a non-revolving committed credit line. The loan is expected to have a term of five years, calculated from the date of the first disbursement, with the principal repayment structured as a single “bullet” payment due at maturity. Interest will accrue at a variable rate indexed to the IBR rate, per the terms agreed upon with the lender. The credit line will allow for drawdowns over a period of 12 months following the execution date of the loan agreement.

The loan from by the state controlled petroleum company from a Colombian private bank is roughly $180.3 million USD.

The funds raised from this transaction are designated for non-investment expenditures, aligning with the terms outlined in Minhacienda’s Resolution and the company’s established financing plan. Ecopetrol confirmed that it has fulfilled all internal procedures and approvals required to execute the loan agreement.

Minhacienda reviewed and authorized the terms of the draft agreement, and the loan documentation includes standard provisions that define borrower default events. These include, but are not limited to, failure to pay principal or interest, any event potentially impairing the borrower’s repayment capacity, issues affecting the integrity of its financial information, and the breach of contractual obligations. In the event of such a default, the lenders would possess the right to demand the early repayment of the loan, in accordance with the procedures specified in the agreement. Conversely, the draft agreement also grants Ecopetrol the right to seek recourse against the lenders in the event of a failure to disburse the loan.

Ecopetrol reported that the spread rate secured for this committed credit line is the lowest obtained in the local market by the company. The company views the terms as an affirmation of support from the domestic financial sector.

The committed credit line is anticipated to provide Ecopetrol with a reliable and flexible source of liquidity. The company projects this will contribute to its overall financial stability, strengthen its cash position, and potentially convey a positive signal to credit rating agencies. The company noted that securing favorable financing terms occurred despite what it characterized as challenging market conditions.