Ecopetrol’s Renewable Leap: Pioneering Latin America’s Energy Transition

In a region where oil and gas historically dominated energy landscapes, Colombia’s state-owned Ecopetrol is positioning itself as a vanguard of the renewable revolution. The company’s recent acquisition of a 1,300 MW solar/wind portfolio from Norway’s Statkraft—a deal set to close in Q3 2025—marks a seismic shift toward diversification. This move solidifies Ecopetrol’s role as a Latin American energy leader, leveraging Colombia’s policy support, geographic advantages, and strategic foresight. For investors, this is a call to capitalize on a transition that is both inevitable and accelerating.

Strategic Positioning: From Oil Giant to Energy Pioneer

The acquisition of Statkraft’s portfolio—spanning solar projects in La Guajira and wind assets in departments like Sucre—adds 614 MW of solar and 750 MW of wind capacity to Ecopetrol’s holdings. This not only exceeds its 2025 target of 900 MW of renewable self-generation but also aligns with its 2040 Strategy, which aims to achieve net-zero emissions by 2050. By integrating renewables into its operations, Ecopetrol reduces reliance on volatile spot energy markets and mitigates oil price risks, creating a balanced energy portfolio.

Crucially, the projects are strategically located in regions with world-class solar and wind resources. La Guajira, for instance, boasts some of Colombia’s highest solar irradiance, while coastal areas like Sucre offer ideal conditions for wind farms. These geographic advantages ensure operational efficiency and low-cost energy generation, enhancing long-term profitability.

Policy Tailwinds: Colombia’s Renewable Ambitions

Colombia’s Energy Transition Law 2099 and Decree 2235 provide a robust framework for Ecopetrol’s ambitions. The law incentivizes green hydrogen projects with tax breaks, while the decree classifies white hydrogen—a naturally occurring, zero-emission resource—as renewable energy. Ecopetrol’s discovery of white hydrogen reserves in the Llanos basin positions it to capitalize on this emerging market, with plans to produce 1 million tons of low-emission hydrogen annually by 2040.

The government’s 2025 target of adding 2,876 MW of renewable capacity is well within reach, thanks to projects like the 350 MW offshore wind farm near Barranquilla and Ecopetrol’s solar/wind portfolio. This regulatory support, paired with auctions awarding over 2.1 GW of renewable capacity since 2019, underscores Colombia’s commitment to diversifying its energy mix.

Near-Term Catalysts: Growth on the Horizon

Investors should watch for three key catalysts in the coming quarters:
1. Q3 2025 Acquisition Completion: The Statkraft deal will immediately boost Ecopetrol’s renewable capacity, with projects slated to begin operations by 2026–2027.
2. Green Hydrogen Plant Launch (2026): The Cartagena Refinery’s 5-MW electrolyzer will produce 800 tons of green hydrogen annually, making it Latin America’s largest such facility.
3. Gas Reserves Boost: The Sirius-2 offshore well (170 BCM of gas) could triple Colombia’s reserves, addressing its gas deficit and lowering energy costs for industries.

Valuation: Undervalued Amid Transition

Ecopetrol trades at a P/E ratio of 6.2x, significantly below peers like Petrobras (9.5x) and state-owned rivals. With 40% of its $20B 2024–2026 capital budget allocated to renewables and hydrogen, the stock offers growth at a discount. Its dividend yield of 7% further rewards investors, even as it pivots toward cleaner energy.

Risks to Monitor

• Regulatory Delays: Permitting bottlenecks could push project timelines beyond 2026–2027.
• Commodity Volatility: Oil price fluctuations may pressure Ecopetrol’s cash flow, though its diversified portfolio mitigates this risk.
• Renewable Tariff Competitiveness: While Colombia’s solar costs are falling, subsidies for fossil fuels could slow adoption.

Conclusion: Act Now on Colombia’s Energy Future

Ecopetrol’s renewable expansion is not just a strategic shift—it’s a decisive move to dominate Latin America’s energy transition. With Colombia’s policy backing, world-class resources, and a pipeline of projects set to deliver growth through 2030, the company is primed to outperform. For investors seeking exposure to a region poised to lead the renewable shift, Ecopetrol offers a compelling risk-reward profile. The time to act is now.