Solar Power Merges Profitability and Sustainability

Q: What is the scope of Greenwood’s projects throughout Latin America?

A: Greenwood Energy, a renewable energy subsidiary of the Libra Group whose subsidiaries own and operate assets in over 50 countries, has supported the development of several projects in Chile, Brazil and Peru. Since 2014, we have focused on Panama and since 2020 in Colombia, which are the two main markets that require our presence. Greenwood Energy, as well as the Libra Group, always focuses on businesses and regions where it can provide a solution to concrete problems. ESG is at the core of our business. Panama and Colombia have a strong dependence on hydropower production. In the fight against climate change, a diversification of the energy matrix is essential. This is especially the case in countries with a strong reliance on hydropower, mainly because of the drought caused by El Niño, which hampers hydroelectric energy generation.

Our projects often go further than power generation: we also strive to create a positive social and environmental impact. Our Latin American vision is to empower local communities by providing energy with a net-positive environmental and social impact. We believe that this is how infrastructure projects should be structured in these challenging times.

Q: Greenwood recently launched the Terra Initiative in Colombia. What does this initiative represent?

A: The Terra Initiative is more than just another infrastructure project. Terra represents the quintessence of solar energy. Even though fossil fuels are more reliable and cheaper, solar energy has a better environmental and social impact. We are now seeing that environmental deterioration is affecting society’s well-being. With the Terra Initiative, we created a project structure that combines the three original pillars of sustainability: economic growth, environmental impact and social impact. With Terra, we adjust our revenues in a precise manner so the project remains financially viable and attractive while still generating a positive impact. The Terra Initiative represents a new and alternative way of doing business. In Greenwood we believe the world needs thousands of Terra Initiatives, not only in the energy sector but in any sector where projects affect the environment. Greenwood, as well as its sister company Greenwood Sustainable Infrastructure in North America, are ready to promote clean power generation initiatives like Terra across North and South America.

Q: What role do Indigenous communities play in the Terra Initiative?

A: For the Terra Initiative, we partnered with one of Colombia’s most well-known Indigenous communities, the Arhuaco people of the Sierra Nevada de Santa Marta. They have participated in many global events and have received international funding toward their conservation strategy. The Arhuaco people have been purchasing land for the past 30 years to protect the environment of the Sierra Nevada from exploitation. For projects like Terra to succeed, we need the collaboration of Indigenous communities that are fully invested in environmental conservation, as not all Indigenous communities have the same degree of commitment toward environmental protection. The Terra Initiative will be replicated with communities that align with Greenwood and Libra Group’s environmental goals and values. Finding these communities and negotiating with them takes time but the first initiative in Colombia is already developing to become an example for the projects that follow.

Q: How does Greenwood finance power generation projects like the Terra Initiative?

A: Projects like the Terra Initiative are not social impact programs, nor are they charity projects. They are infrastructure projects with decent revenues that are aligned with Greenwood’s range of returns. Therefore, we funded the Terra Initiative as we would any of our other power generation projects. There is always a business model that makes the project sustainable. That is the spirit behind the Terra Initiative: a new model for doing business that is profitable while creating a positive environmental and social impact.

Q: What is Greenwood’s prospective for the Mexican market?

A: We have Mexico on our radar and would like to develop projects there. However, we are focused on more critical markets that are strongly dependent on hydropower generation, such as Panama and Colombia. Mexico has a more diversified energy mix that is not so reliant on hydroelectricity. We would love for Mexico to open to more distributed generation (DG). The country needs strong regulations that grant financial coherence to consumers so they can rely on DG through self-supply. It is imperative to start moving away from fossil fuels but that movement should be done responsibly. Strong laws that allow big consumers to use the grid as a virtual battery and to exchange their energy surpluses are essential. Once a clear regulation is established, we would like to see further DG projects in Mexico and develop them ourselves.

When investing funds in companies for them to produce their own power, you need to sign long-term contracts, approximately 10 years for cogeneration and 20 years for solar. The longer the contract, the better the energy prices. In solar, the tariff is most profitable via 20-year contracts. When companies lack a clear regulatory and legal framework, it becomes difficult to promote these long-term contracts. The entire world will move toward renewable energy eventually. It is no longer a question of temporary politics but of survival. Therefore, the energy transition is no longer “if” but “when.” Any law or regulation that delays the energy transition will not endure.

Greenwood Energy is dedicated to developing, financing, constructing and operating power plants in Latin America, delivering energy through Distributed Generation and utility-scale projects.