Assessment Highlights and Regional Strengths
In October 2025, the World Economic Forum released its Energy Transition Readiness Assessment for Latin America and the Caribbean, spotlighting the region’s strong natural endowments in renewables, favorable hydrocarbon baselines, and comparative advantages in low-carbon energy sourcing. Countries such as Chile, Brazil, and Costa Rica earned relatively high scores due to robust commitments to renewable deployment, grid interconnection, and climate policy alignment. However, the report also cautioned that many states lag behind in modernizing infrastructure, scaling utility investments, and reforming regulatory environments to support decarbonization at pace.
Bottlenecks and Structural Gaps
Despite its advantages, Latin America faces several obstacles undermining its transition readiness. Key challenges include fragmented regulatory frameworks, slow permitting for renewable and transmission projects, limited financing mechanisms for distributed energy, and constrained regional electricity interconnection. Gaps in institutional capacity, particularly among regional and municipal agencies—also constrain the ability to integrate and manage variable renewable energy at scale. The assessment finds that unless reforms accelerate, many planned projects may be delayed or stalled, weakening the region’s trajectory toward clean energy targets.
Implications and Strategic Imperatives
To boost transition readiness, the WEF recommends that Latin American governments prioritize institutional coordination, streamlined permitting, and incentive structures that de-risk private investment. Scaling cross-border energy trade and enhancing grid flexibility through battery storage and demand-side management would also catalyze regional integration. For investors and project developers, the assessment signals a window of opportunity: countries that can elevate governance and investment climates may attract a disproportionate share of capital in a decarbonizing world. The region’s resource potential is compelling— but its success hinges on converting that potential into realized, resilient infrastructure.