Colombia Sets Sights on $700 Million Investment from UAE Following Historic Cepa Agreement
Following the landmark signing of the Comprehensive Economic Partnership Agreement (Cepa) with the United Arab Emirates (UAE), Colombia is poised to secure investments ranging from $600 million to $700 million. This significant financial injection is anticipated to revitalize key sectors within the country, notably green hydrogen and the digital economy.
German Mendoza, Colombia’s Minister of Trade, Industry, and Tourism, emphasized the transformative potential of this agreement during an announcement to the state-run news agency, Wam. Mendoza highlighted that the Cepa will considerably bolster trade and investment collaboration between Colombia and the UAE. By engaging their private sectors across various critical areas such as business services, trade, investment, and more, this agreement promises to yield substantial economic benefits.
One of the pivotal advantages of the UAE-Colombia Cepa is the creation of a new trade route linking South America with the Middle East. This strategic corridor is poised to tap into markets comprising over 800 million consumers, marking a significant milestone in global trade dynamics.
The economic relationship between the UAE and Colombia has seen remarkable growth, with non-oil trade witnessing a 43% increase in 2023, reaching a new high of $53.1 million. This figure notably surpasses the trade volumes recorded in 2021, signifying the rapidly strengthening ties between the two nations. The countries have further solidified their partnership through various co-operation agreements spanning renewable energy, environment, hydrogen technology, travel, free zones, and artificial intelligence.
UAE’s President Sheikh Mohamed and Colombia’s President Gustavo Petro were present during the Cepa signing ceremony, which is anticipated to herald a new era in the economic relationship between these nations. Sheikh Mohamed expressed optimism about the agreement, stating its potential to deepen economic connections, thereby providing businesses with unprecedented access to both symbolic and regional markets.
As the Arab world’s second-largest economy, the UAE is on a strategic quest to elevate its non-oil foreign trade above the Dh4 trillion ($1 trillion) mark by 2031 through forging new trade deals. With Cepas already in place with countries including India, Turkey, Israel, Indonesia, Cambodia, Georgia, Mauritius, Kenya, the Republic of Congo, Colombia, and Costa Rica, the UAE is broadening its trade horizons significantly.
Crucially, the UAE’s investment in Colombia’s burgeoning green hydrogen sector reflects the Emirates’ ambition to become a leading hydrogen producer on the global stage. The UAE Ministry of Energy and Infrastructure has underscored its commitment to this goal, having already initiated blue ammonia shipments to countries like Germany and Japan as part of its pioneering efforts in hydrogen production.
Hydrogen, a versatile energy carrier, is classified mainly into three types: blue, green, and grey. The UAE’s focus is on green hydrogen, produced through the electrolysis of water, distinguishing it from blue and grey hydrogen which are derived from natural gas. By collaborating with international entities like the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE) and the EU Commission, the UAE aims to standardize the certification process for hydrogen export, ensuring compliance with varying global standards.
With an ambitious goal to achieve a hydrogen production capacity of 1.4 million tonnes annually by 2031, and subsequently 15 million tonnes by 2050, the UAE is setting a global benchmark in the renewable energy sector. This visionary approach underscores both Colombia’s and the UAE’s commitment to fostering sustainable, long-term economic growth through strategic partnerships and investments in future-centric industries.
The Cepa agreement between Colombia and the UAE signifies a pivotal step towards a sustainable and prosperous economic future, opening doors to numerous opportunities for investments and trade cooperation that promise to reshape the economic landscapes of both nations.
