A Solar Farm, Two Bond Classes, and a Depletion Schedule Nobody Wants to Discuss

Ecopetrol, a Colombian state oil company, is asking the holders of bonds that mature in 2043 to vote on whether the parent company should absorb a 128-megawatt solar farm.

That was weird. Here's the thing: this isn't a debt restructuring, and it isn't a vote on whether Ecopetrol should pay its bondholders less. The bonds are fine. The solar farm is tiny relative to the business. The real story is what sort of company these bonds are sitting on top of, and whether a formality in Colombian securities law has accidentally revealed the shape of a much more awkward transition.

The procedure

Under Colombian securities law — specifically Article 6.4.1.1.42 of Decree 2555 of 2010 — any company with publicly outstanding bonds must convene bondholder meetings when a merger is proposed. That's because a merger changes the legal entity that's making the payments, and bondholders have a right to weigh in on structural changes to their obligor.

Ecopetrol's shareholders already approved the merger in March, absorbing a subsidiary called Parque Solar Portón del Sol S.A.S. that owns an operating solar park in the department of Caldas. The August 18 meetings are just the bondholder side of the same transaction. Fitch Ratings Colombia is issuing an opinion, the bondholders' representatives (Alianza Fiduciaria for the 2010 bonds, Itaú Fiduciaria for the 2013s) are reviewing it, and then the holders vote.

There are two groups of bondholders on the calendar:

• 2010 bonds: 284 billion pesos outstanding, CPI-linked at CPI + 4.90%, maturing December 2040.
• 2013 bonds: Two tranches — one of 348 billion pesos maturing August 2028 and one of 263 billion pesos maturing August 2043 — both CPI-linked.

That's roughly 895 billion pesos total, or about $250 million at current exchange rates. These are long-dated, inflation-protected, domestic peso bonds. The meetings happen back-to-back on August 18 at 2:00 p.m. and 3:30 p.m. Bogotá time.

The vote is unlikely to be contentious. Ecopetrol already owns the subsidiary. The merger just eliminates a corporate layer. But the fact that a national oil company's bondholders are being asked to rubber-stamp a solar park absorption is the clearest signal yet that Ecopetrol's legal structure is being reconfigured around a question nobody wants to say out loud: what happens when the oil runs out?

The depletion schedule

That's the thing the bond meeting accidentally points at. Colombia's proven oil reserves are estimated at roughly seven years of production. Gas reserves are about six years. Ecopetrol itself holds 93% of the country's oil reserves and accounts for 61% of national oil production. At current extraction rates and without further discoveries, its own reserves are projected to be depleted by 2031.

The government stopped issuing new exploration licenses in 2022. So there is no pipeline of new fields to replace what's being pumped. In the second quarter of 2026, production fell to a multi-year low of 705,800 barrels of oil equivalent per day — down 6.6% from the prior year and the fourth consecutive quarter of sequential decline. Blockades in the Meta department deferred 23,000 barrels per day. Lifting costs rose 14.3% in dollar terms.

S&P Global Ratings downgraded Ecopetrol from BB to BB- in April, noting that its adjusted net debt to EBITDA ratio is expected to "consistently rise close to 3.0x" as financial performance weakens. For context, the ratio was 2.3x in 2024 and 2.4x as of March 2025. A 3x net debt to EBITDA on a depleting asset base, in an industry where new exploration isn't happening, is the credit-rating way of saying the runway is narrowing.

The solar park as a label

Portón del Sol is a 128 MW solar park in La Dorada, Caldas. It's operational. It's small. For a company whose oil business generates tens of trillions of pesos in annual revenue, a 128 MW solar farm is a rounding error.

But the merger is the visible tip of a much bigger capital-allocation change. In 2026, Ecopetrol is guiding for total investment of 22 to 27 trillion pesos, with 30% allocated to energy transition, transmission, and roads. That is the first time the state-owned company has assigned that level of capital to non-fossil business segments. On the midpoint of $5.4 to $6.7 billion in organic capex, the energy-transition slice would be roughly $1.6 to $2.0 billion.

The merger by absorption consolidates the solar park directly into the parent, which the company says improves administrative efficiency and enables access to tax and financial incentives. In practice, it also makes the renewable assets sit on the same balance sheet as the declining oil production and the 3x trending debt ratio. Which raises the question of how the numbers get marked and how the two businesses interact on the consolidated financials.

This is not an unprecedented move. It's a national oil company in the early stages of becoming an energy company, absorbing small renewable assets through legal mergers that are mostly about balance-sheet architecture and capital-allocation accounting. The structure looks more like a slow-motion reclassification — from "oil company" to "energy company" — than a genuine pivot. The label changes before the economics do.

The Q2 illusion

Ecopetrol's Q2 2026 earnings are the kind of results that make the transition story look easier than it is. Net income surged 235% year-over-year. Revenue jumped 35%. The stock has been up roughly 67% year-to-date, trading at $16.78 as of Friday. (By way of scale, the stock's 52-week range is $8.45 to $17.75.)

The driver wasn't upstream growth — it was Brent crude averaging $97 per barrel, up 45% year-over-year, and a refining windfall that expanded integrated gross margins from $12.50 to $29.80 per barrel. EBITDA in the refining segment grew 365% year-over-year to 3.09 trillion pesos.

The upstream, where the actual long-term risk lives, went the other direction. Production fell 6.6%. And the Q2 windfall reopened a government subsidy trap: because domestic fuel prices remain capped, Ecopetrol's Fuel Price Stabilization Fund receivables ballooned by 6 trillion pesos in the first half of 2026. The company is guiding for those receivables to finish the year between 8 and 12 trillion pesos. That is money the government owes Ecopetrol but hasn't paid — a liquidity overhang that grows when oil prices stay high.

The simplest model is this: Ecopetrol makes more money when oil is expensive, which makes its government subsidy receivables bigger, which ties up cash, which makes it harder to fund the energy-transition capex that's supposed to replace the declining oil. It's a subsidy trap where the windfall creates the constraint.

What the bondholders are actually voting on

Back to the August 18 meetings. The 2010 bondholders, whose bonds mature in 2040, and the 2013 bondholders, whose longest tranche doesn't come due until 2043, are being asked to approve a solar park merger. Their bonds are CPI-linked and denominated in pesos. They're not getting restructured. The terms aren't changing.

But think about the timeline. If Ecopetrol's reserves are depleted by 2031 and production has been declining since 2013, these bond maturities stretch well beyond the point where the core oil business is still generating cash. The 2043 tranche is a promise to pay in 17 years from now — long after the company's own stated production runway has expired.

The merger vote doesn't change the bond terms. But it does make visible the fact that Ecopetrol is legally reorganizing itself around an asset mix that will look very different in a decade. The solar park is a small first step in a reclassification that the bondholders, who bought the risk of a Colombian oil company, may not have fully priced.

The compressed point

The bondholder meeting is a Colombian-law formality. The merger is a parent absorbing its own subsidiary. The solar park is small. None of it is, on its own, a reason for alarm.

But together they reveal the plumbing of a company whose core asset is depleting, whose government won't let it replace that asset, whose debt ratio is trending toward 3x on a shrinking production base, and whose best Q2 earnings were a commodity-price windfall that simultaneously created a 6-trillion-peso government receivable overhang.

The merger by absorption is basically Ecopetrol's way of saying, in legal terms, "we are not just an oil company anymore." Whether the bondholders who hold paper due in 2040 and 2043 agree with that characterization is the question the August 18 meetings are technically supposed to answer — even though nobody expects the vote to go either way.

The structural implication is that the label change is happening before the economics catch up. The bondholders get the solar park as a procedural courtesy. The investors get to wait and see whether the reclassification tells the truth about what they're actually exposed to.