The worldwide transition to renewable energy systems is motivated by diminishing fossil fuel availability and the intensifying consequences of climate change. This study presents a Mixed-Integer Linear Programming (MILP) model for designing and optimising the bio-fuel and electricity supply chain in Colombia, using sugarcane as the main feedstock and integrating microalgae cultivation in vinasse. Six alternative biorefinery configurations and four microalgae conversion pathways were evaluated to inform strategic planning. The optimisation results indicate that microalgae achieve higher energy yields per unit of land than sugarcane. Ethanol production from sugarcane could meet all of Colombia’s gasoline demand, while diesel and sustainable aviation fuel derived from microalgae could supply around 9% and 16%, respectively, of the country’s consumption. Further-more, pelletised bagasse emerges as a viable alternative to replace part of the coal used in thermoelectric plants. From an economic perspective, all scenarios achieve a positive net present value, confirming their profitability. Sensitivity analysis highlights the critical factors influencing the deployment of distilleries as ethanol price, algae productivity, and sugarcane cost. Furthermore, transportation costs play a decisive role in the geographic location of microalgae-based facilities and the distribution of their products.