The Columbian Government For Energy Solutions Business Essay

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Searching the Colombian Government for a solution to supply Energy to Colombians home, creates la Empresa de Interconexion Electrica S.A. (ISA S.A.) (The Interconnection Electric Company S.A.), a public sector company, which had as a principal aim, the generation, commercialization and delivery of energy in Colombian territory, In 1994, a regulatory reform is introduced to the domiciliary public service law in the country, in order to accede energy to the market, (more information about the regulatory is available in the website at the same time Distributors and Generators of energy become more competitive, trying to draw the attention from power supplier companies around the country, in addition to this was determined the split of the market between generation, commercialisation, and transmission, distribution of energy, consequently, in 1995, ISA had to split under the 1994 electric law (law 143 of Colombian), emerging from ISA, a second company called ISAGEN S.A. which "is a mixed public utility corporation, incorporated as a public company of commercial character, of nationwide order, and affiliated to the Ministry of Mining and Energy of Colombia". It will be in charge of generating and trading energy, and ISA will transmit and deliver it.

ISAGEN S.A. "is a Colombian company dedicated to energy generation, construction of projects and trade of power solutions, it owns and operates five power plants, four of those are from hydraulic origin, and the other one, from thermal origin" (as can be seen in the figure 1), moreover the promotion and execution of generation in the national ambit and the commercialization of natural gas, coal, vapour and other energy of industrial use by network.

Figure .

Isagen focuses its market on the Energy Exchange and on suppliers that provide energy for the Regulated and Non-Regulated market, the latter is constituted by consumers who exceed the energy limit stipulated by CRED (Comision de regulacion de energia y gas) [The regulatory commission of energy and gas], indeed, the suppliers might be decided by them, and both can make an agreement on the tariff, without consult CRED. On the other hand, the stock-exchange will be used to run all the transactions of buy and purchase of power area, where, a contract will be defined with a percentage and price assigned.

In 1999, ISAGEN obtains the certification for its quality Management, demonstrating its comprise with the client satisfaction, steady improvements and quality of developing its objectives. Become it, the first company in the electric sector in acquiring it. In addition, Isagen decides to streamline its organizational structure with four fundamental processes: commercialisation, generation, administration of productivity and administration of value. During the last years Isagen has received more awards for its social and environment responsibility.

Since 1999, Isagen started to struggle with the selling of it, due to the fact it had generated a budget deficit for the Colombian government instead of producing utilities. As a result of this, the state decides to put Isagen up for sale in September 1999, as a solution to settle its debts. At the same time EPM (Empresas Publicas de Medellin), proposes to the government the idea of acquiring just 36% more of Isagen, because they already own 12.96% of it and it is not allow to have more than 49%, this with the purpose of not giving any opportunity to the government of sell it; on the contrary try to solve the problem in effective way, However, in 2001 the plan is cancelled by EPM, because it will cause the lost of its capital and in April of the same year, the government also decide to suspend the selling of it.

Although the company was worried about its future, in 2005 it signs an agreement with ESSA (Electrificadora de Santander), to proceed with the studies on the sogamoso hydroelectric project, the biggest one of the company. It will help the company to achieve the aim of generate the enough energy to supply the county and keep it in the energetic market, where the company is ranked in the third place.

During 2006, the decision on selling stocks is taken by the Colombian government, in order to collect enough money for paying its outstanding debts. Consequently, in January 2007, the stock are launched into the market, where firstly employees, co-operatives and pension fund investment have access to them, and after a time, private companies and citizens could acquire them, becoming the Colombian state owner of the 57.66% of the company. As a result of this selling, the company starts to recuperate and consider the possibility of new projects and clients; thinking in Central America market, begin an era of growth.

In 2008, some projects have begun with Amaya, Manso and Guarino hydroelectric, which will give 1.400 giga volts/h for the next decade to the system, and comply with energy demand, which is the purpose of them.

In 2009, the company fulfils the stakeholder's expectation by increasing its profits, which provide a safe environment and confidentiality about the stability of Isagen. As result, all contracts were renewed by its clients. Furthermore, the hydrosogamoso project begins and more opportunities come to the company(as can be seen in the figure 1), due to the fact it needs to raise its funds for the project, the company focuses on the discovery and study of the Latin America markets, where it found two new hydroelectric projects in Peru, starting with pre-feasibility study. Revealing positive result with those actions, following the shareholders expectative, the clients standards and objectives proposed inside the company this projects.


Isagen currently is positioned as the third company which generate power solutions in the country, reflections made, also in projects that have already finished such as Miel I, which increased the generation of power solutions and expanded the Isagen's market due to the demand of it.

Stakeholders group is defined in the figure 3:

Figure 3

As can be seen in the figure 3, the society wraps all others stakeholders, it means that the company follows a social responsibility which consists in protecting the environment and the development of it as social as economic, therefore, some incomes are used by it.

In the middle are the employees who are directly employed by the company to do their corresponding job. Isagen involves them in participating about activities and aims of the company also team work and human quality are important factors for Isagen.

Clients are conformed by regulated and non-regulated markets which use the company's service. On the other hand, Isagen is interested in following and having high quality standards and resources to meet the client requirements, thus guarantee their loyalty and credibility. Also it looks for new power solutions in order to keep it in the energetic market.

The market is constituted by companies and suppliers that have interest in power solution, thus be in the vanguard of different technological innovations and be able to respond in committee meetings in order to achieve the legislation of it, in this way showing a transparency in any move that the company market.

However, it is important for the new projects, other companies which will be in charge of the investigation, development and construction of them, thus those companies sign a contract to provide goods and services to Isagen, benefiting each other.

Shareholders are companies and natural people that own a percentage of Isagen, through stocks and which interest are focused on their investment and profits. That is why the company wants to increase its market value and the confidence in its image in order to keep and attract more shareholders.

During the time the company has been working with the community in order to help them to develop, therefore it has created new jobs giving them the opportunity of participate. Furthermore, opening to the community debates about where the hydroelectric central will be abdicated, showing its interest in the human rights.

Stakeholder can be divided in:

Figure 4

Stakeholders can be analysed in term of their power and interest as is showed in the table 1 and the figure 5.

Table 1.




Stakeholder inside


Increase their investment made at the beginning with minimum risk.

High. Due to the fact public and private service companies and the state are included in the shareholders. They participate in approving decisions depend on the case.


They keep observing the evolution of their investment and profits of the company.


This group expect to be benefited by the company improvements.

Work hard in order to grow in the country and have a better quality of life.

Low. They do not made decisions on new projects and how the company is making progress. Although, they are an important factor for Isagen.


Strong actions which are taken by the company and can affect them.

They do not contribute to the decisions about how to increase the productivity and profits acquired in activities proposed by the company.

Stakeholder outside


Sustainable environment.

Social responsibility.

Media. The environment is a key at the moment when Isagen has to take a decision on new project, the society always wants to protect the environmental impact and its safety, therefore the company can be affected due to the fact, it can not manage its own criteria without they be approved by the society. However, it does not mean that they deeply influence to make an agreement.


Isagen must follow the Colombian Environmental law.

New solutions to protect the environment.

Social responsibility.


High quality of works.

Responsibility and compromise with their contracts.

Low. Can not made decisions within the company


Not interest in the development of activities which produce profitability for Isagen.

Quality and service.


Participation in meetings proposed by the energetic sector, where are informed new regulations and transactions by it

High. Internal management can be influenced by regulations and national or worldwide milestones


Depend on its behaviour; Isagen will improve the energetic sector performance statistics.


Support by the company in the development and growth of the quality life.

Social programmes

Low. Although, Isagen helps the communities where its projects are being produced, it does have any impact on the activities organized by the company.


The company do not follow the results reported for Isagen.

They just want to be supported by it.


Keep connections with the company to continue working in its future projects.

Low. They are not directly incorporated into the company, they just provide a service.

Do not interfere in taking decisions.


Their interest focus on projects where they

Power - Interest Matrix



- Market

- Shareholder


- Suppliers

- Clients

- Community









- Society

- Employees

Figure 5

One off the main objectives for Isagen maintains informed its stakeholders about new advances and aims achieved by the company. Isagen has different mechanism of communicating, as can be seen in the website where is specified each one for all stakeholders group.

The company uses:




Shareholder`s service office


Customer portal, and others


In the last 15 years Isagen has showed an improvement in its qualities and development, acquiring a long experience of performance in any sector of energy, as a result of its constant search in new markets such as national and internationals. Therefore Isagen has been become more attractive to investors thus being one of the main companies in the Colombian territory.