Latin America is emerging as a focal point for international investors, driven by its substantial renewable energy potential and critical mineral resources. The region’s green energy capacity has seen steady growth in recent years, coinciding with the development of mineral mining projects and a burgeoning electric vehicle (EV) market. As the United States slows its renewable energy deployment, Latin America capitalizes on opportunities, with over 65 percent of its electricity now generated from renewable sources, nearly double the global average.
Historically, hydropower has been the cornerstone of the region’s renewable energy efforts, contributing approximately 45 percent of its electricity. Countries like Costa Rica and Paraguay are on the verge of achieving fully hydropower-generated electricity. In recent years, investments in solar, wind, and bioenergy projects have diversified the energy portfolio, with wind and solar now accounting for 17 percent of the region’s total electricity supply.
Investment Surge and Future Projections
The region has become increasingly attractive to investors, particularly as several governments set ambitious net-zero carbon emissions targets. Since 2014, Latin America and the Caribbean have issued over $250 billion in green, social, and sustainability bonds, showcasing the growing interest in the green energy sector. The mining sector has also drawn significant investment, with companies worldwide focusing on critical minerals to meet the demands of renewable energy and the EV market. A report from McKinsey & Company and the Future Minerals Forum highlighted that in the first three quarters of 2025, global mining mergers reached $30 billion, with 74 percent of that investment directed to Latin America.
As the region expands its renewable energy capacity, forecasts indicate that electricity consumption could rise by 90 percent by 2050, or even 180 percent under certain scenarios, fueled by urbanization, economic growth, and increased electrification. While progress has been significant, challenges remain. The World Economic Forum (WEF) notes that Latin America’s scores for sustainability and equity are strong, yet energy security and enabling conditions, such as infrastructure and finance, lag behind other regions.
Addressing Infrastructure and Investment Challenges
The disparity in renewable energy development across various countries is notable, with nations like Argentina and Mexico still heavily reliant on fossil fuels. Improving the region’s energy infrastructure is critical for a successful transition to renewable sources. Currently, transmission and distribution losses average around 13.5 percent, compared to the global average of 10.2 percent. Outdated grids and limited interconnections hinder the integration of new renewable projects.
Investment in green energy still trails behind other global regions, with the WEF estimating that clean energy investments in 2025 reached $70 billion, only 4 percent of the global total. To support growth, the region requires approximately $150 billion in annual investment by 2030, including $30 billion dedicated to grid infrastructure until 2035. Nearly two-thirds of this funding is expected to originate from private capital.
Countries can enhance attractiveness for investors by mitigating risks associated with high interest rates and regulatory uncertainties. Notably, Brazil, Peru, and Chile have already mobilized nearly $4 billion to construct over 10,500 kilometers of new transmission lines, a model that could be replicated across the region.
To sustain the momentum in renewable energy development, it is essential to invest in education and skills training. The persistent skills gap in technical and engineering disciplines limits the capacity to deploy renewable energy at scale. However, targeted investment in training initiatives can better equip Latin America for a robust transition to green energy.
In summary, Latin America has made notable advances in renewable energy and mineral mining over the past decade, with green energy now contributing a significant portion of its electricity generation. To meet growing demand and expand renewable capacity in the coming decades, the region will require increased private investment. This can be achieved by enhancing regulatory frameworks and reducing financial risks for investors, paving the way for a sustainable energy future.
