EPM Buys Rionegro’s ‘E.P. Rio’ Public Utility; Plans Big Water, Sewage-Treatment Investments

Medellin-based multinational utilities giant EPM announced November 9 that it has completed the buyout of 100% of the stock-and-assets of neighboring Rionegro’s “E.P. Rio” public utility, following which EPM aims to invest COP$550 billion (US$183 million) in water-and-sewage infrastructure in coming years.

Under the deal – finally approved by Rionegro’s municipal government on October 31 — EPM would acquire an estimated 200,000 additional end-user clients, adding to its millions of clients in Colombia and elsewhere in Latin America.

Besides the municipality of Rionegro, E.P. Rio’s stockholders also included the departmental government of Antioquia, Catholic University of Oriente (Antioquia), Chamber of Commerce of Oriente Antioqueño, and the Corporación Empresarial del Oriente Antioqueño.

The fast-growing “oriente” (east of Medellin) region is now known as “Medellin’s second floor,” hosting the main international airport (Jose Maria Cordova, JMC) as well as growing industrialization along the Medellin-Bogota highway.

Commenting on the deal, Rionegro Mayor Andrés Julián Rendón Cardona added that “orderly development of our territory requires quality public services, which EPM has the capacity to offer, and with considerable future investments that our municipality doesn’t have the capacity to assume.

“From now through the end of 2019, EPM will be investing COP$315 billion [US$104 million], of which COP$225 billion [US$75 million] will go directly for capitalization of ‘E.P. Rio.’

“This will permit us to offer end-users of the water-supply system in the urban zone to enjoy quality water service, which is something we didn’t have. Besides, this consolidates a very important goal – that of cleaning-up the Rio Negro and its tributaries, so that we can convert our riverside to a place of meetings and recreation.”

EPM noted that according to projections by Colombia’s national planning agency (Departmento Nacional de Planeacion) the Medellin-Rionegro region by 2035 will become one of 10 of Colombia’s most important centers of economic development, requiring high-quality, robust utilities.

“This transaction will contribute to industrial, commercial and residential growth in Rionegro, through expanded and new infrastructure that will widen and improve public services, achieving the standards that already exist in the [Medellin] metro area and the Aburrá Valley,” according to EPM.

Between now and 2023, EPM will invest COP$140 billion (US$46 million) to complete a new aquaduct connecting the existing “La Fe” reservoir-lake in El Retiro to Rionegro, hence reducing Rionegro’s vulnerability to water shortages, according to EPM. The utility also will broaden coverage for sewer systems in the area.

Under the deal, EPM also will build a new sewage-treatment plant in Rionegro by 2021, aiming to slash contamination of Rio Negro, the river that eventually empties into the Guatape lake — which feeds EPM’s 560-megawatt hydroelectric plant near Guatape, Antioquia.