The Colombian government is preparing a decree to access $2.9 billion (approximately 8.7 trillion Colombian pesos as of March 6, 2026) from the Fondo de Ahorro y Estabilización (FAE), or Savings and Stabilization Fund, according to a draft document reviewed by La República. The move aims to bolster public finances and address budgetary shortfalls, as well as to expedite project approvals related to recent climate-related emergencies.
The FAE, established as a key component of Colombia’s Sistema General de Regalías (SGR), or General Royalty System, is designed to buffer the impact of commodity price volatility on regional finances. Administered by the Banco de la República, the fund accumulates royalties from natural resource extraction during periods of high prices, creating a reserve for times of economic downturn. According to Decree 1076 of 2012, the fund’s income is allocated to a specific autonomous asset.
The proposed decree cites a cumulative decline of 39.9% in SGR revenue between 2023 and 2025 and a 10% nominal decrease in current revenue from 2024 to 2025, as justification for the “desahorro” – or drawdown – of funds. Article 114 of Law 2056 of 2020 authorizes such drawdowns when SGR revenues fall by 20% or more year-over-year, or experience a cumulative decline of at least 20%.
However, the draft decree as well references the need to “agilize the approval process for investment projects” in regions affected by the current climate situation. La República’s reporting indicates that proposed allocations include $100.964 million for La Guajira and $185.831 million for Meta, despite authorities indicating these departments have not been directly impacted by recent flooding. This allocation has raised questions about the prioritization of funds and alignment with stated emergency response goals.
The FAE operates on the principle of saving during economic booms to ensure investment during leaner times. The fund’s assets are held abroad to potentially maximize returns, but the decree does not specify the exchange rate at which these assets were acquired. A difference between the acquisition rate and the current exchange rate (3,751 Colombian pesos per US dollar as of March 5, 2026) could result in a loss to public finances.
the repatriation of $2.9 billion could have implications for the Colombian peso, potentially leading to a depreciation against the US dollar in the lead-up to the first round of presidential elections. The Ministry of Hacienda has not yet commented on these potential currency effects.
