As of April 2023, there were 1,000 active fintechs in Latin America (LatAm) with a vast majority focusing on financial inclusion, tackling the issue of 70 per cent of the population not having access to formal financial services. Em conversa looks to uncover what the future of fintech could look like in the region, following a $2.1billion valuation in 2022.
In March 2024, Unergy, a Latin American cleantech and fintech specialising in the financing of high-performance renewable energy production assets, announced the implementation of its first agrovoltaic projects in Colombia. Exploring how the company is promoting a more sustainable environment in the region, we sat down with Nicolas Villegas, co-founder and CTO of Unergy.
What are some fintech renewable energy trends we’re seeing in Colombia?
In Colombia, solar energy is gaining prominence within the renewable energy sector, supported by favourable policies and fintech innovations that offer new financing mechanisms. The country’s strategic regulatory framework, which includes tax incentives and funds dedicated to non-conventional energy sources, has attracted significant investments in solar projects.
Fintech platforms play a crucial role in connecting these projects with investors, using tools such as green bonds and blockchain technology to facilitate financing. Despite challenges such as grid connectivity and the intermittency of solar energy, the integration of fintech solutions presents a promising future for expanding the footprint of solar energy in Colombia, improving both its economic viability and its contribution to sustainable development.
What is Unergy doing to improve the fintech renewable energy sector in Colombia and LatAm?
Countries in Latin America, including Colombia, are experiencing a rapid increase in energy demand.
Specifically, Colombia has been significantly reliant on hydroelectric power, accounting for 70 per cent of the nation’s generation. However, the biggest opportunities for hydroelectric projects have already been tapped. Given this context, the renewable energy sector has a massive growth opportunity in the following few years, and requires a quick capital injection to keep pace with the regional growth.
Unergy is helping to close the investment gap in renewable energy opportunities by directing resources from both retail and institutional investors toward the development of renewable energy projects that are both necessary for the energetic safety of the region and are also profitable with double-digit returns.
Unergy achieves this by leveraging on blockchain technology to tokenise the ownership over the renewable energy infrastructure and create the uWatt, a digital currency backed by a portfolio of operative renewable energy projects. By purchasing and trading the uWatt, investors from all over the world are creating a liquid market of investment in tokenised renewable energy infrastructure that incentivises the developers of these projects and generates stable yields for the holders of the uWatt token.
How does the Colombian fintech renewable energy sector sector compare to that of the rest of the world?
Given the market necessity of developing high impact renewable energy infrastructure, combined with the availability of a great solar and wind potential, Colombia is an ideal spot to invest in clean energy projects.
Through Unergy’s model, investors from all over the world can easily participate in the development of solar energy projects and generate stable returns. The current regulation favours this kind of projects and allows them to accelerate its development which usually takes between two or three years, down to just five months.
Additionally, economic conditions are starting to settle down, after a period of high interest rates that we lived between 2022 and 2023. This is decreasing the cost of capital and allowing many retail and institutional investors to lean onto alternative investment opportunities, which creates very favourable conditions for the development of the energy infrastructure we need.
What are some unique challenges associated with the region in the fintech renewable energy space?
In Colombia, the regulation of digital assets is still in its very early stages, and although this opens the window for innovation, it also poses some challenges with respect to creating confidence in more traditional investors.
However, the adoption of digital financial products is growing rapidly, and we can see that by the surge of new fintech models around digital wallets, tokenized investments, crowd-funding platforms, crowdlending to MSEs, factoring, digital real estate, and many other models that give the local fintech sector a very diversified offer.
Plans for the future
Unergy is aiming for rapid – but organic – growth in the short and medium term. Our next big step is to launch our renewable energy tokens in new markets across LatAm such as Peru, Chile, Mexico and Argentina, and gain a significant adoption in those markets, while we also strengthen the adoption of our product in Colombia.
We have designed the uWatt in a way that addresses the concerns of the retail sector in these countries, since it maintains a stable value over time, at the same time that it generates stable yields, so it can be used to protect against inflation and at the same time as a highly liquid investment vehicle.
As a start-up, we’re aiming to raise and close a seed round by the third quarter of this year.
Final thoughts
As the global push for sustainable and clean energy continues to gain momentum, Latin America, and Colombia in particular, find themselves at the forefront of a transformative journey. Unergy emerges as a pivotal player in this transition, demonstrating the power of fintech innovations in reshaping the renewable energy landscape.
In conclusion, Unergy stands as a beacon of innovation within the fintech renewable energy sector, embodying the potential for technology-driven solutions to spearhead meaningful and lasting change. Its journey reflects a broader movement towards integrating financial ingenuity with sustainable development goals, offering a glimpse into a future where renewable energy is not only viable but preferred.
As Unergy continues to expand and evolve, its impact on Colombia, Latin America, and potentially the world, offers an inspiring testament to the role of fintech in paving the way for a cleaner, greener future.
Francis Bignell
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