The Canadian multinational owns Isagen, a major energy generation company in Colombia.
Brookfield, owner of Colombian energy generation and marketing company Isagen, has expressed its "deep concern" to the Colombian government and has reserved its position on the measures announced to guarantee the reliability and rate stability of the electric power service.
"In particular, these measures constitute arbitrary, disproportionate and inequitable treatment that radically interferes with the free and efficient provision of a public service," Brookfield said.
The company has conveyed this to the Government in a letter sent to the Minister of Commerce, Industry and Tourism, Luis Carlos Reyes, in which it has considered that these measures violate the standards of protection of foreign investment to which Colombia has committed itself under various international instruments.
According to the company, the draft decree announces measures that aggravate these violations and ignore the basic pillars on which significant investments were made in the Colombian energy sector.
In this context, Brookfield has requested a meeting with the Minister in order to express its reservations and concerns regarding the recent conduct of the Executive.
"Brookfield is writing to you to discuss in greater detail the issues raised in this communication with the firm hope that a hearing in your Office will allow for a dialogue to explore remedies and solutions for the benefit of Colombia," the letter states.
Brookfield believes it is necessary to point out that the measures announced in the draft decree violate the protection standards enshrined in international agreements and would cause a substantial loss in the value of the investment made.
"This communication is made with the firm conviction that the Ministry of Commerce, Industry and Tourism that you direct is the entity that can give comprehensive consideration to the concerns expressed in this communication in order to achieve sustainable development in harmony with compliance with international obligations regarding the protection of foreign investment assumed by the Colombian State," the letter states.
AGAINST FREE ENERGY GENERATION
In particular, according to the complaint, the announced measures openly ignore the basic pillars and postulates of the Constitution and the law that are applicable to the activity of generating electric energy in Colombia.
Among others, Brookfield mentions the lack of recognition of the pillar of economic freedom in the provision of electricity generation services in Colombia, which is embodied in the principles of free competition, free contracting and free development of activities.
These principles aim to ensure that all economic activities in the electricity sector value chain can be developed without arbitrary and unjustified restrictions, giving actors the possibility of freely negotiating the economic conditions of their transactions in the market.
Therefore, one of the pillars and basic postulates on which Brookfield made its investment is that generators have the freedom to define the relationship between both energy marketing mechanisms based on the availability of their resources and the management of their risks in the short, medium and long term.
Brookfield has also criticised the fact that the project imposes a maximum limit of 5% of sales on the regulated energy exchange for generators with renewable sources, which is why the Colombian State is giving preference to generators of electric energy with liquid fuels, mixtures of liquid fuels or combustible gas.
"There is a substantial, arbitrary and unjustified discrimination between the treatment of different actors in the electricity market that affects generators of electricity from renewable sources, going against the commitments, policies, plans and incentives for the energy transition promoted by the Colombian State," the company maintains.
