By partnering with companies at the forefront of innovation, we aim to help accelerate the pace of change underway.
The transition from fossil fuels to renewable sources of energy is already having a positive effect in parts of the region, introducing competition and bringing down prices while making those markets cleaner. Yet investment in clean energy will clearly need to ramp up to another level to be transformative and help countries achieve their energy goals.
The private sector is the driving force in the energy market, though it’s up to governments to create legal and regulatory frameworks that reduce risks, spur competition and promote sustainable technologies. The IDB Group works with both the public and private sector to support the appropriate financing mechanisms and operating environments that enable clean energy to thrive.
At IDB Invest, we promote investment in renewable energy power generation, including in photovoltaic solar, wind, hydro, biomass, biogas and waste-to-energy plants. Because the sun doesn’t shine around the clock and the wind doesn’t blow 24/7, the region will need sufficient baseload generation, such as natural gas-based generation, and some capacity for energy storage, requiring more attention to batteries and other technologies.
Another area for potential investment is in better transmission and distribution systems. Also, international interconnections and integration of power markets will play a significant role in a cleaner Latin America.
We also want to invest strategically to encourage energy efficiency and widespread electrification. Electricity is a relatively clean source of energy, so the more it can be used to heat homes or drive cars, the better.
All this will require more capital than has traditionally been available in many markets in the region. That’s where IDB Invest plays a role, in some cases allocating our own capital and in others mobilizing outside resources. In addition to offering new financial products to mitigate risks, we promote the development of capital markets for long-term investment in energy infrastructure and work with our clients to implement gender programs that foster equality and diversity and encourage more women to enter the field. Our climate resilience programs, meanwhile, establish new design requirements for infrastructure projects that face potential threat from climate events.