2025 is an important year for Latin America as the location of COP30 is in Belém, Brazil, in November. ‘Brazil is considered to be a beacon as both a big oil exporter and major renewable energy resource,’ said session moderator Ieda Gomes of the Oxford Institute for Energy Studies (OIES).

Lead Energy Management Trader Javier Vaquerizo of Contour Global, a mid-sized independent power producer (IPP), announced that his company had an ambitious plan to double installed capacity from now to 2030, ‘investing a lot in renewables, phasing out coal from our portfolio and keeping gas as a transition fuel’.

The company is currently involved in some asset rotation and is primarily focused on developing solar and battery storage in its five-year horizon. Contour Global has also entered Chile with large-scale solar PV and battery energy storage systems (BESS) from Grenergy, a Spanish-listed renewables developer, in a $900mn enterprise comprised of three independent projects in Atacama (Quillagua 1 and II) and Tarapaca (Victor Jara). The company also has wind farm operations in Peru and Colombia, as well as the US and Spain.

‘Latin America is the right place to be successful if you are willing to take some risks. However, you need to be prudent because uncertainties are very high in IPP,’ Vaquerizo warned.

Nevertheless, there had been significant energy transition progress in Brazil, as 89% of power is renewable – from hydro, solar and wind to biomass. According to Robert Ardenghy, President of the Brazilian Institute for Oil and Gas (IBP), ‘good progress is being made despite hurdles around reliability and customer price concerns’.

Indeed, the Brazilian government was forced to recently halt a biodiesel price rise and delay a proposed rise in the biodiesel mix at the pump from 14% to 15%, due to concerns about using more vegetable-based oil in response to the ‘food versus fuel’ debate.

‘Latin America is the right place to be successful if you are willing to take some risks.’ – Javier Vaquerizo, Lead Energy Management Trader, Contour Global
 

Ardenghy also recognised that the traditional oil and gas businesses ‘have done a lot to reduce the amount of CO₂ per barrel’. He believes that ‘the world is not going to be totally independent of fossil fuels, given future demand for petrochemicals and lubricants, and the need for stability and security in whole energy systems’.

Given the higher interest rates post-COVID, Vaquerizo said his company is likely to be ‘more selective and opportunistic’ about investments in Latin America, because uncertainties are still high. Though he recognised that the economics are pretty resilient, with predicted growth of 2–4% according to different bank forecasts.

He also mentioned recent delays and failures in the renewables sector, including delay to a major wind farm development in La Guijira, Colombia, which faced strong opposition from local indigenous people and was beset by bureaucratic delays.

Moreover, there was a major blackout in Chile on 25 February 2025 which affected 90% of the population and disrupted critical infrastructure, services and industries across the country. Chile’s President Gabriel Boric declared a state of emergency, since 14 of the country’s 16 regions were impacted by the blackout. ‘The blackout in Chile has raised new questions on how renewable energy systems need to be managed in terms of communities and energy grids,’ remarked Vaquerizo.

The ‘risk-return balance’ is a key factor in deciding where to invest. ‘We are looking for those countries in Latin America where there is political stability and a regulatory environment that is not leading to huge volatility – even though the returns could be much higher,’ he explained.

Moderator Gomes said she regularly attends the National Gas Conference in Colombia, and noted that the government had decided to cancel permits for new exploration of oil and gas. However, in recent years there had been massive imports of LNG, due to heatwaves, and in January 2025 the gas distributors increased gas prices by 36%. ‘They are cutting the veins of [oil and gas] exploration but don’t have a framework for companies to invest in renewable energy,’ she remarked.

COP30: focus on finance anticipated
The discussion then turned to COP30, which will be held in Brazil this year. Despite the UN conference being held in a city located in the middle of the Amazon tropical forest, protecting biodiversity is not likely to be the main theme, but rather economics.

Ardenghy suggested that three key aspects of COP30 will be under consideration. Firstly, updating the national commitments to net zero that countries are going to present. To date, only 14 countries have presented their Nationally Determined Contributions (NDCs) for decarbonisation.

Secondly, despite discussing the ‘phasing out’ of fossil fuels for agreement at COP28 in Dubai, the terms were watered down at the eleventh hour to ‘transitioning away’ from fossil fuels. Ardenghy called for stronger terminology. ‘We need to force the transition towards a more decarbonised energy mix.… This is not just about economics or emissions, but about the social situation. If countries are highly dependent on fossil fuels, how can you force them to be first in line [for decarbonisation]? It’s not going to happen if it’s going to create a lot of energy poverty.’

Thirdly, the big issue is finance. ‘I have worked as a diplomat for many years on environmental discussions, including previous COPs, and every time that the financial issue comes to the table, many countries disappear. Nobody wants to talk about it. Take Brazil; 50% of our emissions come from deforestation, illegal mining and illegal activities in our environmental area. So, we need financing to curb these emissions dramatically. We need law enforcement, equipment and so on. Hence, I’m very anxious to see what’s going to happen at COP30,’ he said.

Green hydrogen development
Latin America is considered to be a Mecca for green hydrogen development. Chile, for example has issued a Green Hydrogen Strategy for 2050, and other countries are developing frameworks despite recognising the high cost.

Ashley Coaker, Vice President of Warley Consulting, suggested that Latin America could learn from the example of Egypt, host of COP27, which defined a hydrogen strategy through to 2030 and then beyond. ‘This defining of a vision of where the country wants to go by 2030 and then by 2040, enables the framework to be set with a regulatory environment to follow… helping investors be free of uncertainty,’ he said.

Coaker said that there are good prospects for a low-carbon, green hydrogen strategy in Brazil, potentially using the green hydrogen locally rather than for export internationally.

Fundamentally, there are four key issues with project finance, he stated: Does the project work? Who’s going to build it? What will be produced? Who’s going to buy it and will they pay a premium? ‘That’s the fundamental struggle – no one is yet ready to pay the premium for green hydrogen,’ he said.

Furthermore, green hydrogen developments tend to be a series of projects, each with separate final investment decisions and separate customers. ‘So, you need a framework that derisks, in order that the investment decisions can be taken together,’ he added.

The political compass
Eduardo Monteiro, Co-CIO of Victory Hill Capital Partners, made an important point about geopolitical swings, from right to left and back again in Latin America. ‘Nevertheless, they tended to maintain a strong and resilient regulatory framework, which gives energy investors confidence’, he said.

Monteiro claimed that Brazil has ‘a vocation for renewable energy’ and was the location for a major distributed generation solar project which ‘grabbed a lot of headlines’. In May 2021, Victory Hill committed $63mn to fund the construction of remote distributed solar generation across 10 Brazilian states. This programme is one of the fastest-growing segments of the Brazilian power market.

In 2022 the company acquired a 198 MW hydropower project from Energias de Portugal, located in Espirito Santo. And in early 2025, the company brought online two additional solar distributed generation (DG) sites in Brazil, bringing the total capacity of its portfolio to 34.3 MWdc. A further solar DG project with 6.25 MW capacity is due to go online in 1Q2025, with three more sites to follow later in the year.

‘Brazil has been very successful attracting private capital for renewable energy projects, because the regulatory framework has not changed substantially despite moves from right wing to left and back again since 2001. There is an important concept in the country: “We don’t change the rules and we don’t do retroactive shifts”, which is important for investors. So, there was a very compelling case to go to Brazil. Furthermore, the situation has improved macroeconomically since the beginning of the century, when there was an issue around foreign reserves and controls,’ he said. 

Finally, Gomes asked: what could Latin America do better to become a leader in the energy transition? 

Monteiro was convinced that Brazil should continue to offer stability when it comes to rules and regulations. ‘The key challenge is attracting capital. There are lots of opportunities both for the domestic market and export. Just make sure to educate investors about the strengths of the country and the risks. Coaker agreed that ‘regulations can de-risk investors, and government support (like carbon capture and storage projects in the UK) enables projects to happen, and something similar is needed in Latin America,’ he said.

Ardenghy emphasised the need to improve infrastructure, not just in national terms but also connecting with other countries. ‘Brazil has a wide range of renewable energy sources because of a national grid that connects the whole country. But it needs to be connected with Argentina, Uraguay, Chile, Peru and other countries, to share electricity and natural gas. This would create better stability in the continent.’

‘Policymakers and governments in Latin America need to take a more holistic approach to energy systems and grids… connecting the dots… given the threat of climate change. They need to plan to legislate in a way that makes markets more resilient, and de-risk market structures through capacity payments in some markets,’ added Vaquerizo.

• Further reading: ‘Towards an offshore wind sea use concession auction in Brazil’. After a law made offshore wind legal in Brazil, government and industry are taking the first steps towards first power. Executive President of ABEEólica – Brazilian Wind Energy Association and New Technologies – Elbia Gannoum, also a member of the Brazilian government’s high-level advisory board (Conselhão) under President Lula, explains the current situation.
• Transportation is responsible for around one-fifth of global emissions and is a vital sector to decarbonise. Find out what challenges Latin America faces as it looks to electrify its road transport sector.