Written By: Emma Websdale
Latin America and the Caribbean are attracting a growing share of global clean energy investment as the region’s governments are strengthening policy support and expanding local supply chains, reveals new report.
According to a joint study from the Inter-American Development Bank (IDB) and Bloomberg New Energy Finance (BNEF), the 26 countries of Latin America and the Caribbean are attracting a rising share of global clean energy investment, out-performing global clean energy investment trends. The region represented 6% of the total $268.7 billion global figure, up from 5.7% in 2011, when global investments came to $302.3 billion.
Findings from the report entitled, ‘Climatescope 2013: New Frontiers for Low-Carbon Energy Investment in Latin America and the Caribbean’, found that the region’s total renewable capacity increased from 11.3 gigawatts (GW) in 2006 to 26.6 GW in 2010.
The study notes that the area’s growing prominence of global clean energy investment is mainly due to the region’s expanded local supply chains and the rise of stronger policy support. In recent years, 30 additional clean energy policies have been introduced to the area, bringing the total to 110.
“Policy frameworks are expanding and strengthening in Latin America and the Caribbean, and the actionable information provided by the Climatescope is helping to reduce information gaps and catalyze new investment in clean energy”, said Nancy Lee, MIF General Manager.
She added, “The rapidly falling costs of clean technologies such as solar and wind power combined with an improved investment climate means that clean energy generation in the region is now truly affordable. The MIF will continue supporting Latin America and the Caribbean’s progress.”
The report provides an assessment, index and interactive web tool, ranking the ability of 26 countries in the region to attract low-carbon energy investment based on 39 indicators including greenhouse gas management activities, climate financing and prior clean energy investments. Based upon these factors, Brazil is identified as the leading market.
Brazil -Latin America’s largest economy currently attracts the vast majority of clean energy investment and represents the bulk of renewable energy capacity added to the region over the last six years.
Moving up by three positions and in second place was Chile, a nation that has recently passed policies to encourage solar photovoltaic (PV). Chile’s renewable investment has quadrupled to $2.1 billion from 2011 to 2012, and the country’s new renewable energy target has doubled.
Nicaragua, finished third overall, showing strength in enabling framework and clean energy investment.
“The growth of clean energy investment outside Brazil in 2012 was significant”, said Michael Liebreich, chief executive of Bloomberg New Energy Finance.
“Total financing outside Latin America’s largest country jumped to 45% in 2012 from 17% in 2011, as Chile, the Dominican Republic, Mexico and Uruguay, among others, posted outsized growth rates.”