EPM and Sociedad Hidroeléctrica Ituango - HI - reach a conciliation agreement that favors the protection of public resources and the country's energy stability
- Fecha de publicación
- 2026-01-30 00:00
- Contenido
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The conciliation agreement approved by the Arbitral Tribunal establishes a definitive resolution of the technical, legal, and economic disputes in question arising from the BOOMT contract.
The result is achieved thanks to rigorous work by the technical, financial, and legal teams of both entities, and their external advisors.
This is a very significant milestone for the stability and reliability of the National Interconnected System, as it will allow EPM to move forward with completing the project that will provide 17% of the energy the country needs.
In the context of the dispute between Empresas Públicas de Medellín (EPM) and Sociedad Hidroeléctrica Ituango (HI), the Arbitral Tribunal has approved the conciliation agreement submitted by both parties, with the favorable opinion of the delegate of the Office of the Inspector General of Colombia, who confirmed that the legal and jurisprudential requirements and conditions necessary for its approval were met. The technical, legal, and economic conditions agreed upon are based on the valuation of the contingency, as well as on reciprocal and reasonable technical and commercial positions, aimed at preserving and rebalancing the BOOMT contract. This ensures its future execution under conditions of stability, predictability, and preservation of public resources, in addition to contributing to the country's energy stability.
The parties shall make the adjustments to the BOOMT contract to incorporate the agreements reached and approved by the Arbitral Tribunal. These changes will allow HI to receive periodic remuneration, which will be calculated using the established methodology and reflected in the financial model of the BOOMT contract. Additionally, technical aspects related to the construction and commissioning of the project will be addressed.
For John Maya Salazar, CEO of EPM, “the agreement reached will allow us to continue focusing on completing the second stage of the project, which will bring four additional units into operation on top of those already in service. In this way, we will contribute to the reliability of the National Interconnected System. Additionally, the conciliation agreement ensures EPM's financial sustainability and guarantees the continuity of transfers to the District of Medellín, which will allow it to carry out the projects set out in its development plan.”
On the other hand, the agreement ensures that the Government of Antioquia and EPM, shareholders of HI, receive financial resources, via dividends, to develop social, environmental, and infrastructure projects for the benefit of the Department of Antioquia, for Medellín, and for the country.
With the agreement, the early termination of the BOOMT contract is being avoided, which would have implied a reduction in the revenues that EPM receives from power generation. Additionally, the remuneration resources for HI are obtained, necessary for the payment of dividends to the Institute for the Development of Antioquia (IDEA), the Government of Antioquia, EPM, and minority shareholders.
Background of the Agreement
On March 30, 2011, EPM Ituango and HI signed the BOOMT contract (Build, Own, Operate, Maintain and Transfer) for the construction, financing, operation, maintenance, and transfer of the Ituango hydroelectric power plant, the largest infrastructure project being built in the country. This contract was assigned to EPM through an assignment agreement on January 19, 2013.
On April 28, 2018, when the Project had reached 87% completion in its schedule and budget, the blockage and natural unblocking of the Ancillary Diversion Gallery (ADG) occurred, which marked the beginning of the contingency. EPM spared no effort or resources to protect the community, care for the environment, and advance the construction of the electricity generation plant, in order to mitigate the risks downstream of the dam.
On May 12 of that same year, the right diversion tunnel of the Project was naturally unblocked, adding to the existing contingency. As a result, 5,000 m3/s of water flowed continuously for at least four hours, which forced the preventive evacuation of communities located downstream of the dam. Subsequently, the right diversion tunnel was naturally blocked again by landslide material and remained that way until September 19, 2024, when it was definitively sealed in an engineering feat.
In 2020, HI initiated an arbitration process against EPM, alleging contractual breaches related to the closure of the diversion gates and start of reservoir filling (milestone 7), commercial operation of unit 4 (milestone 8), and unit 1 (milestone 9) of the BOOMT contract.
On June 24, 2024, HI filed a new arbitration claim seeking, among other things, a declaration that EPM had breached its obligations regarding the commissioning date of the last generating unit of the Ituango hydroelectric plant (milestone 10). Additionally, it requested that EPM be ordered to pay the corresponding remuneration, as well as the penalty clauses for enforcement, late payment interest, and the penalty for early termination of the BOOMT contract.
In turn, EPM filed a counterclaim requesting that, for the calculation of the remuneration to which HI would be entitled, the weighted average cost of the debt incurred by EPM, the environmental and social provisions required by the project, as well as the modification of the commissioning date of the first stage, among other variables, be considered.
Since the second half of 2024, EPM and HI have carried out negotiations seeking to find solutions to the disputes that arose. Several memoranda of understanding were signed and, finally, they jointly reached a conciliation agreement for the definitive resolution of the conflicts, which was approved yesterday by the Arbitral Tribunal.
With this result, the arbitration process initiated by HI against EPM comes to an end.
A Boost to Territorial Sustainability
To date, the Ituango Hydroelectric Project shows 94.48% progress; it has delivered electric sector transfers between February 2023 and November 2025 totaling COP 179,102 million to 155 municipalities in the country, two Regional Autonomous Corporations (CAR), and one National Park.
EPM is a promoter of development in the 16 municipalities in the areas of influence and interest of the Hidroituango plant. Since its inception to date, the Company has invested COP 2.6 billion, a historic figure in the subregions of Northern, Western, and Lower Cauca in Antioquia.
In environmental matters, EPM carries out the compensation of 24,121 hectares of tropical dry, tropical humid, and premontane forests in the area of influence in Northern and Western Antioquia. For the development of the compensation and restoration strategy, EPM has a nursery for the production of seedlings of native species from tropical dry and tropical humid forests.
Similarly, the territory has a wildlife care and assessment center, which allows specialized professionals to attend to different animals that may be affected by the works or by any other circumstance; population studies of birds, felines, and otters, in addition to fauna and flora monitoring and fish fauna monitoring, including monitoring of aquatic ecosystems downstream of the Project, among other environmental investments.
Some Progress Highlights
Construction and recovery of more than 1,500 km of new and restored roads.
122 educational institutions, both new and improved.
739 families with new or improved housing
800 new wooden homes built under the Programa Aldeas.
5,489 families benefit from the natural gas service.
Optimization of water supply systems in some of the municipalities in the area of interest. Among other notable investments.
