Colombia

Economic progress and ongoing conflicts

Colombia is the only South American country with access to two oceans: the Pacific and the Caribbean. The country has been marked by violence and civil war. A 2016 peace agreement with the country’s largest guerrilla group FARC (Fuerzas Armadas Revolucionarias de Colombia) has significantly improved the security situation. However, conflicts and armed confrontations between left-wing and right-wing groups continue. Some regions remain outside the control of the state.

Colombia is one of German development cooperation’s partner countries and one with which Germany works closely under intergovernmental agreements. The country’s economy is growing, but not everyone is benefiting from the progress. Despite the country’s poverty significantly decreasing over the past 20 years, income disparities between rural and urban populations have remained practically unchanged.

KfW Development Bank is supporting Colombia on behalf of the German Federal Government in preventing new conflicts and advancing the peace process. It is also helping the government to achieve its climate goals by conserving natural resources and using them sparingly, as well as through sustainable economic development.

In Colombia, conflicts between the government, guerrillas and paramilitary groups have been ongoing for more than 50 years. Structural causes of the violence are social and economic inequalities, unequal access to land and natural resources, corruption, the absence in some regions of the state’s monopoly on the use of force, the weak judicial system and the resulting impunity that this sometimes brings. There are also conflicts over drug trading and illegal mining.

On behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) and together with the Gesellschaft für internationale Zusammenarbeit (GIZ), KfW is supporting the peace process. Important progress was made in 2016 with the signing of the peace treaty between the Colombian government under President Santos and the country’s largest guerrilla group to date, the FARC-EP.

Current challenges include the return of land to victims of the conflict, judicial processing of crimes and integrating former guerrilla members into society. Since 2014, KfW has been supporting the government with a total volume of around EUR 650 million with reform financing and the necessary investments in post-conflict areas. The supported programme helps to reduce structural causes of conflicts and therefore contributes to improving the population’s living conditions.

After Brazil, Colombia is the world’s second most biodiverse country. More than half of the country’s area is forested with around 15% of forests under nature conservation protection. But biodiversity is under threat from severe soil erosion, water loss and natural phenomena such as hurricanes and the El Niño effect. Climate change is further exacerbating the situation. Also, deforestation had been declining until the signing of the peace treaty, but then began rising again. One reason for this is the power vacuum left by demobilising the FARC-EP, a vacuum that is now being used by criminal groups, for example, to cultivate and traffic drugs.

KfW is supporting the Colombian government in forest and species conservation, thereby laying the foundations necessary for sustainable development, income generation, a fairer society and thus also for long-term peace in the country. This will also help Colombia achieve its internationally pledged climate targets.

With a total volume of almost EUR 750 million, KfW Development Bank has been helping to combat deforestation since 2014, for example, by supporting coffee farmers in reforestation and agroforestry. Development funds are also being used to expand national protected areas and improve their management. A key contribution to environmental protection is being made by the investment programmes in municipal treatment plants as well as credit lines for measures to conserve water. The support helped to meet key conditions for Colombia’s accession to the Organisation for Economic Co-operation and Development (OECD) in 2018.

Most Colombians live in urban areas. In 2018, only around 20% of the total population lived in rural areas. This poses enormous challenges for Colombia’s major cities. Cities like Bogotá and Medellín struggle with high levels of particulate matter pollution due to poorly developed public transport networks and outdated vehicles.

However, the country has enormous potential for developing renewables, which is hardly being utilised at present. Just 4% of installed capacity comes from renewable energy sources (excluding large-scale hydropower).

Investing in sustainable urban development, energy saving programmes and renewables will not only help Colombia to reduce its greenhouse gas emissions, but also create a more equitable society in which access to public transport and clean electricity is not a privilege. Since 2014 and in cooperation with national promotional banks, KfW Development Bank has also invested a total of around EUR 480 million in sustainable transport systems, renewable energy sources, energy saving programmes and reform financing.