By: Staff Writer
June 20, 2025
The World Economic Forum in a recent report said that Latin America and the Caribbean (LAC) saw stagnation in energy transition readiness in 2025 (0% y-o-y), with modest improvements in infrastructure, innovation, human capital and regulation offset by declines in financial investments.
Transition readiness, a subindex of the forum’s energy transition index (ETI), includes the stability of the policy environment, the level of political commitment, the investment climate, access to capital, consumer engagement, and the development and adoption of new technologies.
The report, Fostering Effective Energy Transition 2025, said that the WEF highlighted that the LAC’s top priorities for the region are hydropower resilience, green hydrogen, innovation and that the region needs to bolster clean technology innovation and grid resilience to reduce overdependence on hydropower.
High renewables share, strong hydro and solar potential. Industrializing economies with leapfrogging potential and young, well-educated populations are the LAC’s top strengths. However, regulatory and institutional instability and low inclusion is a challenge along with financing and technology access constraints or limited innovation capacity.
The LAC also saw marginal gains, with resilience still constrained by often-unreliable grid infrastructure and substantial T&D losses, but there are opportunities for stable power system reliability and expanding diversification of energy sources.
Challenges remain with High transmission and distribution (T&D) losses averaging 16 percent to 38 percent and declining flexibility in electrical system.
The report said the LAC: “Sustained steady progress through rural electrification and stable electricity industry prices over the years, however, recent gains were minimal due to gas price volatility. There are opportunities for near-universal urban access to electricity and progressing clean cooking access – Declining fuel imports and energy subsidies.”
The challenge with this, however, is the “relatively limited advantage in low carbon technology production and inequity in rural access.”