Businesses have an opportunity to help create a better future. We make investments in sustainable solutions and lend in a way that mitigates social and environmental risk.
Why we invest in Responsible Financing
Addressing the environmental issues that face our future will require financial resources. As a bank, our financial resources and expertise position us to help create a better future through responsible financing.
A Renewable Future in Colombia
Colombia is the third largest country in terms of population in Latin America and enjoys one of the strongest economies in the region. GDP is growing at a rate of 3% – 4% per year since 2010, and the middle class is increasing steadily.
Powering a growing economy
As Colombia’s economy has grown, demand for electricity has increased along with it. Similar to many emerging markets in Latin America, Colombia lacks the infrastructure necessary for generating electrical power. According to research by the World Bank, demand for power is expected to increase significantly throughout Colombia and the surrounding region by 2030.
Colombia can supply approximately 16,000 megawatts (“MWs”) of electricity serving about 48 million Colombians. To put that in context, Canada’s electricity supply is close to 133,000 MWs — which serves a population of only 36 million. When compared with Canada, Colombia serves a population that is about 1.3 times larger with an electricity generation base about 1/8th the size. To supply electricity to a growing economy in the coming decades, Colombia needs to dramatically scale up its generation infrastructure.
Hydropower as national renewable energy source in Colombia
Due to the country’s abundance of rivers, Colombia relies heavily on hydropower. The government is committed to reducing greenhouse gas emissions and hydropower accounts for about 70% of Colombia’s total annual electricity production — with potential to grow even more. A recent study found that if Colombia could fully realize the potential of hydropower, it could provide more than enough electricity to meet the needs of the country for many years to come.
Isagen’s role in Colombia’s hydropower sector
Colombian electricity company Isagen plays an important role in producing and providing renewable energy to Colombian customers. Isagen operates six modernized large-scale hydropower plants that account for about 17% of the country’s total installed generating capacity and they have projects in development that could generate an additional 3,300 MWs. Until very recently, the Colombian government owned and controlled the majority of Isagen. However, in late 2014, the government made a move to encourage foreign investment in Colombia’s hydropower sector.
Brookfield Renewable Partners enters the Colombian market
Brookfield Renewable Partners, L.P. (Brookfield) is a Canadian-based global renewable energy company with a focus on hydroelectric generation. The company owns and operates one of the largest independent renewable power businesses in the world. Over 85 percent of their portfolio is hydroelectric, including recently purchased Isagen, a transaction supported by Scotiabank in a number of ways.
Funding the transaction
For the past 15 years, Scotiabank has worked for Brookfield on numerous corporate and project financings. Scotiabank’s presence in and understanding of the Colombian market helped secure its position in 2016 to underwrite a US$750 million multi-tranche financing to assist Brookfield together with its institutional partners in the acquisition of Isagen.
Investing in renewable energy benefits everyone
Colombia’s government has been able to use proceeds from the privatization of Isagen to invest in other critical projects through its fourth generation (4G) public-private partnership infrastructure program, including roads, ports and airports – to improve the economy through trade and productivity growth. As the economy develops, Isagen will play a key role in realizing the full potential of renewable energy in Colombia, ensuring the country has access to the electricity to power its growth.
Here’s how we demonstrate our commitment to responsible financing in ways that mitigate risk.
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