Colombia's EPM lands $350 million AFD loan with a rate tied to sustainability
What's the deal? Empresas Públicas de Medellín (EPM) signed US$225.6M loan with the French Development Agency (Agence Française de Développement, or AFD)Dealroom has a profile for this one. Try Dealroom → on September 11, 2026. The debt runs 15 years with a three-year grace period and will fund the Colombian utility's investment plan across its water, energy, and wastewater businesses.
Why it matters: For the first time in Colombia, AFD will apply a mechanism that lowers the interest rate if EPM outperforms sustainability targets set in the contract. The senior debt is priced at Term SOFR plus a margin, with disbursements linked to the utility meeting agreed indicators.
What's the endgame? The proceeds target climate-change mitigation and adaptation, renewable-energy development, water and biodiversity protection, expanded service access, and gender-equality initiatives. EPM said the money will accelerate infrastructure expansion, modernization, and maintenance.
"These resources will allow us to continue modernizing our infrastructure, strengthen our systems' capacity to respond, and ensure the continuity of services," said John Maya Salazar, general manager of EPM.
The relationship: This is EPM's third credit deal with AFD. The first, in August 2012, provided $338 million for power and gas projects; the second, signed March 16, 2023, provided $189.8 million over 10 years for water, sanitation, and energy investments.
The financing also includes technical-cooperation resources covering sediment management at hydroelectric plants, water-network modernization, and a framework for prioritizing voluntary environmental investments.
"This partnership reaffirms our support for EPM as a benchmark for sustainable development in Colombia and Latin America," said Lorena Chara, AFD's country director in Colombia.
The signal: At $348.69 million, the loan sits in the top 8% of all debt deals recorded in Colombia. It underscores how development-finance lenders are increasingly tying capital to measurable environmental performance rather than offering it flat.
Read more: financecolombia.com
Image credit: U.S. Army Corps of Engineers Los Angeles District
