What Canadian companies need to know about the Colombian energy market
In 2014, Forbes wrote, “None of the risks [in Colombia’s business environment] are insurmountable, and companies that can mitigate them stand to prosper.” In energy specifically, there are considerable business opportunities for Canadian companies. Colombia is expected to run out of oil in the next seven years, creating significant opportunities in renewables, specifically bioenergy and solar. Colombia’s residential and industrial energy markets have an anticipated compound annual growth rate of 6.8% between 2012 and 2017, roughly 3ppts higher than the US. How can innovative Canadian energy companies leverage these opportunities?
An analysis of data from third-party sources including the World Bank, International Energy Agency (IEA), and the U.S. Energy Information Administration (EIA), indicates that the growth and energy challenges facing Colombia today provide significant business opportunities for Canada’s energy companies. Energy security, greater reliability and greater energy access for remote communities are a priority for the Colombian government and utilities. To this end, there is a surge of investment and government policies focused on diversifying Colombia’s energy mix to increase the penetration of renewables. Canadian experiences supplying energy to remote communities are particularly applicable to Colombia where many rural residents have electricity for less than eight hours a day.
The question is: what do companies need to know if they are seeking to leverage these export opportunities? One successful Canadian company operating in Colombia provides some insight.
Survalent Technology is a Canadian company that has embraced opportunities within the Colombian energy market. Survalent offers real-time operational intelligence, integrating data across the network to optimize utilities’ operations, reliability and performance. The company’s offerings include Advanced Distribution Management Systems and Substation Automation products. In their experience, Survalent has learned that Colombia is one of the leading buyers of innovative technologies among their Latin American neighbours. Colombian utilities are keen to advance their grid and are leaders in terms of technology adoption.
Gustavo Hoyos, Regional Director for South America notes that a major challenge for Canadian companies looking to enter the market is adapting to the business culture. Technical training is essential in order to better understand the potential for Canadian technologies to provide value to system integrators or end users. Mr. Hoyos likens selling a solution without technical training to “trying to sell cars to people that don’t know how to drive.” Technical and cultural fit is critical for Canadian products to penetrate the Colombian market.
The World Bank Group ranks Colombia the easiest Latin American country in which to do business—placed at 34/189 countries. Nevertheless, as Gustavo noted, understanding context and gaining insight into the energy market is critical for Canadian companies to succeed. The Advanced Energy Centre aims to provide objective and in-depth energy market insights through its Going Global Series. To read more about the Colombian Energy Market, read the Going Global Colombia report.