Ashmore invests $55m in Colombian energy

The emerging markets firm has backed a transmission line along the country’s Atlantic coast and a stranded gas power plant.

A subsidiary of emerging markets investor Ashmore Group has committed $55 million to two energy projects in Colombia.

Ashmore Colombia, working out of Colombia’s capital, Bogota, and Lima, Peru, has made two investments in the power and energy sectors there.

One of the transactions is to build a transmission line on Colombia’s Atlantic coast. Ashmore cited an unreliable electricity system in this part of the country and energy demand growing by 3.6 percent by 2019 as reason for its investment.

“A combination of 100% pre-determined cash flows for 25 years, completion risk effectively transferred to a well-known engineering, procurement and construction (EPC) contractor and private equity returns, providing critical power investment for the region, underline why we like this type of investment on behalf of our investors,” Ashmore Columbia chief executive Camilo Villaveces said in a statement.

The second deal is an investment in a 58.85MW stranded gas power plant. The Termomechero Morro uses stranded gas, a by-product of oil production, sourced from the Pauto and Floreña oil fields in eastern Colombia.

“Alongside the attractively-priced gas and highly predictable cash flows, the sizeable upsides from our investment in Termomechero, which would significantly improve base case returns, make this a very exciting project,” added Juan Pablo Fonseca, Ashmore Colombia’s head of investment.

Ashmore Group is headquartered in London and listed on the London Stock Exchange. It manages $52.6 billion across emerging market sectors including external debt, local currency, corporate debt, blended debt, equity, alternatives and multi-asset products. It has offices in China, Colombia, India, Indonesia, Japan, Peru, Saudi Arabia, Singapore, Turkey, the United Arab Emirates and the US.