Arbitration Colombia

Termocandelaria Power Initiates ICSID Arbitration Against Colombia Over Air-e-Related Energy Losses

Published 2026-06-12 3 sources Arbitration Colombia Energy Sector ICSID Investment Disputes Colombia

Stories are grouped across languages, rewritten into a fixed editorial format, and linked to original sources. How we report.

TL;DR

  • Termocandelaria Power S.A. commenced ICSID arbitration against Colombia.
  • Claim alleges $198 million losses due to regulatory measures post-2024.
  • Case concerns payments for energy supplied to the state-intervened Air-e.
  • Arbitration is filed under the Spain-Colombia bilateral investment treaty.

Overview

Termocandelaria Power S.A., a Spanish energy company, has initiated international arbitration proceedings against the Republic of Colombia at the International Centre for Settlement of Investment Disputes (ICSID). The dispute centers on alleged regulatory actions by Colombia that have prevented Termocandelaria and its subsidiaries from receiving full payment for energy supplied to Air-e, an electricity distributor under state intervention since 2024. Termocandelaria seeks compensation totaling approximately $198 million, asserting these losses are a result of measures incompatible with the protections guaranteed under the bilateral investment treaty between Spain and Colombia.

What Happened

On April 6, 2026, Termocandelaria Power formally filed a request for arbitration with ICSID, and the proceeding was registered by the institution on April 27, 2026.

The company alleges that regulatory measures enacted by Colombian authorities, particularly those from the Commission for Regulation of Energy and Gas (Creg) and the state entity supervising Air-e, have prevented adequate remuneration for the electricity supplied by Termocandelaria and its affiliate Termobarranquilla.

These measures reportedly emanated following the Colombian government's intervention in Air-e, which lasted over 19 months, resulting in significant payment delays or shortfalls to electricity generators.

Termocandelaria claims the cumulative financial impact exceeds $198 million, with further damages expected if the situation persists. The company asserts these actions breach the 2007 Spain-Colombia investment treaty, specifically on fair and equitable treatment and protection from arbitrary or discriminatory measures.

Termocandelaria has engaged the international law firm Freshfields and the Colombian firm Rincón Castro Abogados as legal counsel and maintains its ongoing business operations in Colombia.

Context

Air-e, a major electricity distributor on Colombia's Caribbean coast, has been under direct state intervention since 2024 due to financial instability and concerns over service reliability.

Termocandelaria, through its subsidiaries Termocandelaria S.A.S. and Termobarranquilla S.A.S., controls a significant thermal generation capacity in Colombia, totaling nearly 1,466 MW.

The dispute occurs within a broader context of regulatory change and market stress in Colombia's electricity sector, with other generators reportedly also facing extended delays in payment and expressing concerns over the stability of investment conditions.

The ICSID proceedings were initiated under the Spain-Colombia bilateral investment treaty, which has been in force since September 2007 and provides for investor-state arbitration in the event of treaty breaches.

Why It Matters

  • This arbitration highlights heightened investment risk perceptions in Colombia's energy sector amid regulatory and financial turmoil.
  • The outcome may influence future foreign participation and regulatory policies in Colombia's electricity market.
  • A substantial award or settlement could impact Colombia's public finances and its relationships with other energy sector investors.

Sources

Related Stories