The body was inspired to create the initiative based upon the results of a study from the Latin American development bank CAF (Corporacion Andina de Fomento) that shows the positive effect that creating new renewable sources across the world can have on reducing greenhouse gases.

Germán Arce Zapata, Colombia’s minister of energy and mines. (Credit: Ministerio de Minas y Energía)

The funding calls for CAF to develop the project jointly with German development bank KfW. The European Commission’s Latin America Investment Facility (LAIF) will also provide additional resources and support.

“The approval of the funds allows CAF to implement a climate financing mechanism in the Colombian energy sector and transfer the benefits to companies in the country that demonstrate success in the generation of renewable energy,” said Ligia Castro, CAF’s corporate director of environment and climate change.

Colombia already derives nearly two-thirds of its electricity generation from hydroelectric sources. So these resources are expected to go to other, less-developed sectors in the nation’s renewables scheme.

“We are working to promote the development and use of nonconventional sources of energy, especially those of a renewable nature, as a necessary means for sustainable economic development, the reduction of greenhouse gases, and the security of the energy supply,” said Germán Arce Zapata, Colombia’s minister of energy and mines.