Energy and the IDB

Energy in Latin America and the Caribbean: Opportunities and Challenges

A comparative advantage of the Latin America and Caribbean region in the World context is its large endowment of sources of primary energy. Among these are the large reserves of hydrocarbons, the huge hydroelectric potential of the region’s rivers as well as the region’s wind and solar energy potential.  Therefore, the first challenge for the IDB is to contribute with knowledge and financing for the region to tap into and realize the vast energy potential of the region. 

The Western Hemisphere shows a clear contrast between the energy balances of North and South America.  While North America as a sub region shows a growing energy deficit, South America shows an energy surplus with a high upside potential, given the endowment of undeveloped sources of primary energy. There is a large potential for Hemispheric Energy Integration both between North and South America as well as among different sub-regions in South America.  The second challenge for the Bank is to promote and facilitate energy integration in the Americas. Wider integration will benefit all the countries of the LAC region. The IDB is leader in promoting regional energy integration as witnessed by the Central American Energy Integration System (SIEPAC), which is a model the hemisphere can turn to and follow.

The third challenge for the IDB in energy matters, is to achieve regional energy development and integration on the basis of the Sustainable Energy and Climate Change Initiative (SECCI) of the Inter-American Development Bank.