Colombia to divest stake worth $3.58bn in ISA to Ecopetrol

August 12, 2021 (Last Updated August 12th, 2021 16:28)

The proceeds will be used by the South American country to overcome the financial crisis and further energy transition.

Colombia to divest stake worth $3.58bn in ISA to Ecopetrol
ISA operates in energy, roads, and telecommunications sectors. Credit: wasi1370 / Pixabay.

Ecopetrol has finalised a deal to purchase the Colombian Government’s 51.4% stake in state-owned company Interconexión Eléctrica (ISA) for $3.58bn (COP14.2t).

In this regard, an inter-administrative share purchase agreement has been signed by Ecopetrol with the Colombian Ministry of Finance and Public Credit (MHCP).

Colombian Finance Minister Jose Manuel Restrepo was cited by Reuters as saying at a press conference that the deal would provide the government with resources while advancing the country’s energy transition goal.

Reoters added: “The acquisition is one of the most important operations in the country’s recent history, contributing to the energy transformation and the reactivation of the economy.”

The deal follows the submission of offer in January 2021 by Ecopetrol to purchase a holding stake in ISA.

The acquisition is a part of the Colombian state-owned oil and gas operator’s efforts to become a comprehensive energy company.

Ecopetrol CEO Felipe Bayon said was cited by the news agency as saying at the conference: “Ecopetrol has the financial strength to access this type of resources.”

The firm now plans to undertake necessary procedures towards the closing of the transaction.

Bayon said that the deal is planned to be completed by 6 December 2021. However, the firm is keen on closing the transaction earlier.

ISA, through 51 affiliates and subsidiaries, operates in the energy, road, and telecommunication sectors.

It has operations in Colombia, Brazil, Chile, Peru, Bolivia, Argentina and Central America.

Last year, Ecopetrol has partnered with Shell to jointly develop three gas blocks in the Caribbean.

The blocks, which include Fuerte Sur, Purple Angel and COL-5, are situated in deepwater areas of the Colombian Caribbean.