Who Lends to Colombian Solar: Peso Debt, Loan Tenor, and a 300-Basis-Point Year

Executive summary

On September 30, 2026, the board of Banco de la República raised the policy rate by 25 basis points to 12.25%. It was the fourth increase of the year. The rate opened 2026 at 9.25%, rose 100 basis points in January, 100 more in March, 75 in June, and 25 in September. Headline inflation was 6.2% in August, and the analysts the bank surveys expect 6.8% by December.

That cycle matters to anyone holding or buying Colombian solar because of how the sector borrows. Every utility-scale solar project financing reviewed for this piece was written in pesos, by a short list of lenders: Bancolombia, the Grupo Aval banks, BBVA Colombia, IDB Invest, and above all the Financiera de Desarrollo Nacional (FDN). The announcements publish loan amounts. They rarely publish the tenor or the rate the loan floats on, and those are the two terms a 300 basis point year acts on.

Below I go through what the public record shows about who lends, what a rate move does to a peso loan, how loan tenor lines up against contract tenor, and what to ask a sponsor about its debt.

What the public record shows

Three things stand out.

The debt is in pesos. Every project financing in the table is denominated in COP, including IDB Invest's tranches. A multilateral lending in local currency fits the revenue: spot, bilateral, and auctioned power are all paid in pesos, as covered in how Colombian solar sells power. Matching debt currency to revenue currency takes the mismatch out of the project company. The investor still carries it. A USD equity holder converts each distribution at whatever exchange rate holds on the day it is paid, the problem currency risk and the Colombian solar opportunity deals with. The one dollar loan in the table went to Enel Colombia's corporate balance sheet, with Italy's export credit agency guaranteeing half of it.

FDN is in almost every recent deal. Of the five financings in the table dated 2025 or later, FDN lent to four. Its role changes from deal to deal: about half the debt alongside BBVA at El Campano, all of it at Chicalá, a 16-year tranche at Puerta de Oro, a five-year loan at Puertos de Santander. It also channels concessional money. In 2025 FDN signed a US$138.5 million loan from the Inter-American Development Bank that blends IDB ordinary capital with resources from the Climate Investment Funds, and pv magazine reports that Puerta de Oro drew on it. For a development bank, four of five deals is the mandate working. For the market, it means one balance sheet stands behind much of the sector's new debt, and FDN's appetite helps set how fast the pipeline reaches financial close.

Tenor is the term almost nobody publishes. Three of the seven financings in the table have a published tenor, and they run from 5 to 16 years. The contracts behind the plants run longer. El Campano has a 15-year pay-as-generated PPA with Isagen and 20 years of reliability charge income. Puertos de Santander has long-term PPAs with AES Colombia, Nitro Energy, and BTG Pactual, plus 20-year firm energy obligations.

What 300 basis points does to a peso loan

Peso bank loans in Colombia are commonly priced as a spread over the IBR, the interbank reference rate for the peso money market, which tracks the policy rate closely. When the Ministry of Mines and Findeter opened financing for municipal renewable parks in 2024, for example, the Findeter line on offer was priced from IBR plus 0.7% for terms of up to 10 years. When the policy rate rises, every unhedged IBR loan reprices at its next reset.

Take an illustrative COP 300 billion senior loan, roughly El Campano's size, priced at IBR plus a margin and left fully unhedged. A 300 basis point rise in IBR adds about COP 9 billion of interest a year. That figure is arithmetic on a hypothetical loan. It does not describe El Campano or any other named project, whose rate terms are not public.

The revenue side does not move on the same schedule. Colombian power contracts are generally indexed to inflation; the 2019 auction contracts, for instance, adjust monthly with the producer price index. Over a full cycle, inflation and the policy rate travel together. Within a single year they can come apart, and an unhedged interest line reprices within weeks while an inflation-indexed revenue line catches up on a lag. The difference lands on the debt service coverage ratio (DSCR), the covenant lenders test before cash may leave the project.

For an equity investor, that is usually where higher rates show up first. A DSCR that falls below the lock-up level stops distributions well before it threatens a default. Cash that would have been paid out stays inside the project company. The steps a distribution goes through once it is released, from withholding to registration to conversion, are in getting the money out.

The standard protection is an interest rate swap that converts IBR into a fixed rate, and the date it was struck matters as much as its existence. A loan swapped at financial close in 2024 or 2025 fixed its cost before this year's increases. A loan that hedges in steps as it draws during construction has been fixing its rate on the way up. If the swap is shorter than the loan, the unhedged years reprice later at rates nobody can see today. Two loans with identical margins can end up with very different all-in costs.

Tenor against contract

The August piece on revenue routes asked who holds the merchant tail when a power contract is shorter than the loan. Some of the 2026 deals raise the reverse question. FDN's loan to Puertos de Santander, announced September 10, runs five years against 20-year firm energy obligations. Six days later Banco de Bogotá announced a COP 300 billion commitment to the same plant without publishing its tenor, so the full structure may look different. On its face, though, a five-year tranche on an asset with a 20-year obligation assumes a refinancing, priced at whatever rates and lender appetite exist five years from now.

Recontracting risk is about the price of power. Refinancing risk is about the price of money. A model for a Colombian solar asset should show both, with the assumed refinancing rate printed next to the current policy rate so a reader can see the gap.

When the asset changes hands

Puerta de Oro reached commercial operation in July 2026. On September 21, Isagen announced it would buy 100% of the project from Patria (75%) and Ashmore (25%), in cash and subject to regulatory approvals. Project loans commonly require lender consent to a change of control, or repayment when one happens. Anyone buying an operating Colombian plant buys its debt terms too, including whatever share of the rate was fixed or left floating at close.

The same deal shows a concentration worth noting. Isagen co-sponsors Shangri-La and El Campano with Atlas, is El Campano's 15-year offtaker, and is now buying Puerta de Oro. Five of the seven financings in the table involve Isagen, FDN, or both. A portfolio of Colombian solar projects can look diversified by site and department and still trace its credit back to a handful of institutions.

What to diligence

1. For each tranche: currency, lender, amount, tenor, and amortization profile. If any tranche is in dollars, ask who carries the conversion back to pesos and at what cost.
2. What the rate floats on, what share is swapped to fixed, the date and rate of the swap, and whether the swap runs as long as the loan.
3. The DSCR lock-up and default levels, and the headroom at a 12.25% policy rate, not at the rate in the base case.
4. Where the loan is shorter than the contracts: the refinancing date, the assumed refinancing rate, and who bears the difference if rates are higher.
5. For any development bank or concessional tranche, the reporting and performance conditions. The IDB loan FDN signed in 2025 brought FDN into IDB CLIMA, a pilot that pays rewards tied to the climate impact of the projects it finances; ask what reporting that passes down to the project.
6. Change-of-control and transfer provisions, and whether a sale needs consent from every lender or a majority.
7. The names behind the debt case: who buys the power, who issues the letters of credit, and how often those names repeat across the portfolio.

What to watch

I am watching three things through 2027. First, the path of the policy rate. In its September statement the bank reported analysts' two-year inflation expectations falling to 4.0% even as their December expectations rose to 6.8%. The market is pricing relief later, and every refinancing assumption depends on when it arrives. Second, FDN's capacity, since it sits in four of the last five deals reviewed here. Third, the first financial closes for the 995 MW of solar awarded in the July auction. Those projects have to borrow at 2026 rates against contracts that start paying on January 1, 2030, and the terms they get will show how lenders price that gap.