Economic Demographics
Market Overview
Market Opportunities
Competitive Landscape
Market Entry
Trade Barriers, Intellectual Property, Taxes
Finance
Industry Contacts
Trade Events
Contact Us
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Economic Demographics
Market Overview
Market Opportunities
Competitive Landscape
Market Entry
Trade Barriers, Intellectual Property, Taxes
Finance
Industry Contacts
Trade Events
Contact Us
Economic Demographics
Population: 50 million (2020)
Per capita income: US$ 6,428.7 (2019)
GDP: US$ 271 billion (2020)
Percent Composition of GDP: (2019)
Services: 57.53%
Industry: 26.27%
Agriculture: 6.74%
Market Overview
Water and Wastewater Colombia’s access to urban potable water infrastructure reaches an estimated 97% of the population. In Colombia, 91% of the population has access to public sewage but only 31% of the country has wastewater treatment systems in place. In rural areas, only 73% of the population has access to potable water and only 70% has access to sewer pipeline networks with no wastewater treatment. The Municipal Services Superintendence estimates that of over 62.7% of wastewater goes untreated due to the lack of basic treatment facilities.
Therefore, the government has estimated service deficits for 3.9 million people lacking adequate services in wastewater treatment and some 6.4 million lacking sewers. The Colombian government planned investments in these areas of about US$ 13 billion over the next ten years. Most of these investments will come from the central budget, but the government aims to attract private sector developers with their own financing arrangements.
Key focus areas for enforcement and implementation of wastewater treatment include:
integrated water resource management and monitoring systems
water and wastewater treatment and sewerage systems
underground water supply
toxic and hazardous waste collection and disposal
Solid Waste Management Colombia has improved its regulatory framework for solid waste management by creating financial incentives to promote recycling and waste treatment, and by limiting how much waste can be discharged into bodies of water and public sewage systems. Most municipalities contract directly with Colombian companies for these services but, in 2018, Bogota expanded the competition for its US$ 1.2 billion solid waste management market by dividing the city into segments and holding a competitive auction.
The Bureau of Oceans and International Environmental and Scientific Affairs (OES) has supported engagements between U.S. and Colombian industry associations to assess and advise on public policy in the solid waste sector and to encourage additional commercial opportunities for U.S. companies.
Air Pollution Control Given the large impact of pollution on health in Colombia, the Ministry of Environment is improving environmental regulations and strengthening enforcement and capacity by initiating projects across the nation to support environmental commitments. In compliance with the United Nations Framework Convention on Climate Change, in 2020, Colombia set an ambitious target of reducing greenhouse gas (GHF) emissions by 51 percent from baseline projections by 2030 for its Nationally Determined Contribution (NDC).
Colombia currently has 26 systems to monitor air quality. The areas most affected by significant levels of air pollution include: Medellin, Bogota, Ráquira (Boyacá) and Yumbo (Valle del Cauca).
It is estimated that of the 13 million vehicles operating in Colombia, 5 percent (200,000) are diesel heavy-duty vehicles. President Duque’s administration is working to position the country to be a leader in sustainable mobility for the next decade. Colombia has increased biofuel blend mandates to E10 (10 percent ethanol) and B12 (12 percent biodiesel). In 2020, the country approved the first pilot program for 20% biodiesel blends to evaluate the impact on the reduction of emission and performance on heavy-duty vehicles. The program will last 36 months and include 699 heavy-duty vehicles in the city of Medellin (Aburrá Valley). The biofuel policy objective is mitigating climate change’s effects.
Market Opportunities
Water Sanitation The city of Bogota will invest in 73 projects in Water and Sewage Systems. The city has allocated USD $2.1 billion for investment in water sanitation from 2020 to 2024.
The three highest valued projects are the renovation and replacement of supply systems and local aqueduct networks valued at US$ 230 million, the renovation of the second local aqueduct system valued at US$ 103 million and the Sewage Processing in Canoas valued at approximately US$ 1.5 billion.
The PTAR Canoas project is a project for wastewater treatment and will be the largest in Colombia. It will treat 70% of wastewater in the city and other metropolitan areas (Soacha). The city of Bogota plans to announce this project by the end of 2021. The project will be led by the Acueducto de Bogota and is currently in the process of receiving environmental license approval. The estimated value of the project is between US$ 1.2 and 1.5 billion.
Solid Waste Management The city of Bogota has three ongoing projects for leachate treatment valued at US$ 301 million, energy recovery facilities valued at US$ 301 million, and cells for Bogota’s principal landfill (Doña Juana) valued at US$ 998 million. The aforementioned projects are in the pre-feasibility studies stage. The funding sources will be the budget of the Mayor’s Office, royalties, and Public Private Partnerships (PPP).
Efforts to further improve solid waste management by increasing utilization of organic waste could create additional opportunities for U.S. companies that sell biogas, biofertilizer, and composting technologies.
Waste to Energy System The city of Bogotá and the Public Services Administrative Unit (UAESP) are in the process of identifying technologies, companies, and investors interested in leachate treatment systems and solid waste to energy systems for the city.
Colombia continues to demonstrate increased interest in waste-to-energy technologies as some of the country’s sanitary landfills have started to reach full capacity in cities such as Bogota and Sincelejo.
Additionally, this industry is interested in working with the government in the structuring and development of Public-Private Partnerships to overcome lack of government investment and cost overruns in municipal water treatment systems.
Competitive Landscape
Colombia’s equipment, supplies, and consultant industry is well established and consists of domestic companies, local manufacturing plants, and international corporations.
The Colombian Association of Sanitary and Environmental Engineering (ACODAL) has more than 150 members composed mainly of environmental consulting companies, suppliers, and manufacturers. These members include multinational corporations such as Siemens, CDM Smith, Hanna Instruments, Xylem, among others.
Colombia imported US$ 139 million of environmental technology related equipment in 2020. US$ 48 million was imported from the United States, representing a 34% market share. The primary competitor countries are China, Germany, Spain, France, Brazil, and Mexico.
European waste management companies are starting to do more business in Colombia and the French company Veolia which undertakes solid waste pickup and processing services in medium-sized Colombian cities, now commands nearly a third of the national market share. U.S. firms primarily interact with this market through the sale of machinery and waste processing equipment, rather than by directly operating landfills.
Market Entry
Colombian law does not require foreign firms to secure local representation for private sector sales. However, local companies prefer to deal with foreign firms that have a local representative to ensure access to after-sales services and spare parts. The one exception to this law is for sales to the government, which do require foreign bidders to have legal representation in Colombia.
To secure an agent, representative, or distributor, the foreign company must execute a contract that meets the provisions of the Colombian Commercial Code. This contract must be registered with the Chamber of Commerce in the city where the agent/representative is located. Agency or representation agreements do not require government approval.
An agent or representative differs from an appointed distributor. The former is legally associated with the principal and may enter into legal agreements on the principal’s behalf, while the latter may act independently from the principal. Distributors may purchase items from a foreign supplier or wholesaler and then sell them locally at their own discretion and risk.
The U.S. Commercial Service recommends that U.S. companies consult a local attorney to execute an agency or distribution contract and use its International Company Profile (ICP) service as part of their background check to thoroughly vet prospective partners.
Formality, personal relationships, and trust are key ingredients for a long-lasting contract. Colombians want to know their supplier or business partner personally before deciding whether he or she is trustworthy. U.S. companies seeking agents, distributors, or representatives in Colombia should consider contacting the U.S. Commercial Service office to request assistance in entering the Colombian market.
Trade Barriers, Intellectual Property, Taxes
Import Taxes and VAT With the ratification of the U.S.-Colombia Trade Promotion Agreement in May 2012, U.S. environmental goods and equipment imports to Colombia received duty-free treatment, improving the competitive advantage of U.S. exporters.
The value added tax (VAT) is 19%.
Standards Decree 2269 from 1993 designated the Colombian Institute of Technical Standards and Certification (ICONTEC) as the main organization for standard development, and the 2010 Decree 323 designated the Colombian National Accreditation Organization (ONAC) as the national accreditation organization.
ICONTEC’s technical standards development committees cover a wide range of issues and topics on metrology, air, soil and water quality, solid waste, conformity assessment, environmental assessments, among others. For a complete standards development committee list, please visit ICONTEC’s Technical Committees webpage to find sector guidelines and technical standards, issued by ICONTEC, the American Water Works Association -AWWA, and the American Society of Testing Material – ASTM.
The technical standard RAS-2000 establishes the requirements for drinking water and basic sanitation. Decree 2981 of 2013 regulates solid waste public service.
There is no specific import regulation, but it is very important to follow the labeling requirement for shipping this type of product to Colombia.
In order to develop a water treatment plant and solid waste management project in Colombia, environmental approval is needed from Colombia’s National Environmental Licenses Authority (ANLA).
For additional information on Colombia’s standards, please check the Country Commercial Guide for Colombia .
Finance
Water and solid waste services are provided by public or private management companies.
Colombia’s foreign exchange system is regulated by the Colombian Central Bank. The Superintendence of Companies and the Colombian Tax and Customs Authority (DIAN) jointly supervise compliance to this regime, depending on the nature of the operation. Both organization have the right to impose penalties or fines.
Most products are imported through letters of credit. Soft and long-term financing are important sales tools, especially for government imports or public tenders. Foreign suppliers, financial intermediaries in Colombia, or foreign financial institutions, may finance Colombian imports.
Colombian importers may freely negotiate payment terms with their suppliers, but importers must list the agreed payment terms on the import documents and may not subsequently change them. General trade finance is freely available and letters of credit are widely used in Colombia. The standard payment term is 60 days.
Commercial banks are allowed to complete all authorized credit operations, with the exception of leasing operations and real estate sector investments. Only commercial banks provide checking accounts. Commercial banks dominate the financial market, accounting for over 80% of the financial system’s assets.
The Colombian Territorial Development Bank – FINDETER has financed drinking water, basic sanitation, and solid waste projects in Colombia.
The Inter-American Development Bank is active in Colombia, providing technical cooperation, investment grants, grant financing, and loans for water and sanitation projects in Colombian.
The U.S. Export-Import (EXIM) Bank is also active in Colombia, providing both export insurance and loan guarantees for Colombian importers. www.eximbank.gov
The U.S. International Development Finance Corporation (DFC) is exploring opportunities in Colombia. DFC provides a variety of programs including project financing, direct equity, and support for investments. https://www.dfc.gov/
There are no restrictions for currency negotiation and there is a flexible exchange regime. There is an obligation to “channel” foreign currency through the foreign exchange market (either through foreign currency market brokers or a clearing account of the operation holder) for foreign investment in Colombia and Colombian investment abroad, imports and exports of goods, among others.
For additional information on Colombia’s finance, please check the trade finance section of the Country Commercial Guide for Colombia .
Trade Events
ACODAL International Congress (Water, Sanitation, Environment and Renewable Energies) www.acodal.org.co
ANDESCO Congress https://congreso.andesco.org.co/
Contact Us
Norcia Ward, Commercial Assistant – U.S. Commercial Service Bogota, Colombia – Email Norcia WardMarin .
Norcia Ward joined the U.S. Commercial Service in Bogota, Colombia in 2011. She is a sector lead responsible for the Oil & Gas, Energy, Environmental Technologies, Renewable Energy, Cosmetics, and Travel & Tourism industries. Additionally, she conducts market research and performs matchmaking services for CS Bogota’s clients. She has been recognized for outstanding performance with several awards, including the Bronze Medal Award for Superior Federal Service.
Norcia Ward has a degree in Economics and Foreign Trade from University Los Libertadores, a specialization in Marketing from University Jorge Tadeo Lozano and a Master’s in International Business from University Carlos III of Madrid.
