Termocandelaria Power Initiates ICSID Arbitration Against Colombia Over Air-e Dispute
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TL;DR
- Termocandelaria Power S.A. filed an ICSID arbitration case against Colombia.
- The dispute relates to payments for energy supplied to Air-e S.A.S. E.S.P.
- Termocandelaria seeks over US$198 million in alleged losses.
- The case is grounded in the Spain-Colombia bilateral investment treaty.
Overview
Spanish energy company Termocandelaria Power S.A. has initiated international arbitration against the Republic of Colombia at the International Centre for Settlement of Investment Disputes (ICSID), seeking compensation for losses arising from measures affecting payments for energy supplied to Air-e S.A.S. E.S.P. The claim is made under the Spain-Colombia bilateral investment treaty.
What Happened
Termocandelaria Power announced it filed for ICSID arbitration on April 6, 2026, with the proceeding registered under case ARB/26/20 on April 27, 2026.
The dispute centers on Colombian government measures since 2024, which the company claims have prevented proper remuneration for electricity supplied to state-administered Air-e.
Termocandelaria asserts that the measures violate Colombia's obligations under the 2007 Spain-Colombia BIT, specifically regarding fair and equitable treatment and the prohibition of arbitrary or discriminatory actions.
The company reports losses exceeding US$198.4 million and notes that future damages may arise pending the arbitral process.
Context
Termocandelaria Power operates in Colombia through subsidiaries Termocandelaria S.A.S. E.S.P. and Termobarranquilla S.A. E.S.P., with a combined generation capacity of about 1,466 MW.
Air-e is currently managed by Colombia's public utilities regulator, the Superintendence of Public Services.
The claim is represented by law firms Freshfields (international) and Rincón Castro Abogados (local).
Why It Matters
- The arbitration invokes state obligations under an investment treaty, illustrating recurring tensions in the energy sector between foreign investors and host-state regulation.
- The outcome may affect regulatory stability and investor confidence in Colombia's electric power sector.