
Original article: https://lnkd.in/gh2EFs4s
EDP Renováveis (EDPR) has decided to exit its 0.5 GW wind projects in La Guajira, Colombia, marking a significant shift in its investment strategy. The decision follows a detailed review of the projects’ economic viability, impacted by several challenges over the past few years.
Initially, EDPR entered the Colombian market in 2019 with two wind projects, Alpha and Beta, with a combined capacity of 0.5 GW and expected annual generation of 2.5 TWh. However, the projects faced delays due to COVID-19-related restrictions, changes in government, and a series of economic and regulatory challenges, including:
Environmental permitting delays and changes to interconnection line requirements.
Increased construction costs and the devaluation of the Colombian Peso.
Unfavorable new legislation and the increase in financing costs.
The annulment of emergency measures by the Colombian government in late 2023.
EDPR attempted to mitigate the situation by renegotiating 80.7% of the PPAs and pushing for regulatory reforms, but the lack of progress on the regulated revenue framework and other structural issues led the company to reevaluate its position.
As a result, EDPR will not proceed with the remaining investments in these projects, estimating potential losses of up to €0.7 billion, including project impairments and guarantees. These losses are non-recurring and will not impact EDPR’s recurring net income or dividend policy.
EDPR will continue to pursue legal actions to protect its interests in Colombia.
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