Morales says there are significant opportunities for renewable energy investment.
“There are many countries in Latin America that are pursuing lofty targets for the development of renewable energy assets and represent promising venues for solar and wind projects," he says. “These markets need modern, flexible transmission grids in addition to the projected solar and wind generation facilities."
Many Latin American countries that have relied heavily on hydroelectric power are looking to diversify their energy sources in the face of uncertain weather conditions.
BMI Research forecasts non-hydro renewables generation will experience rapid growth over the coming decade, with total power capacity for non-hydro renewables in Latin America projected to grow +124% from 2015 to 2024.
"The opportunity for infrastructure investment in Latin America is enormous," Morales says, “But there are significant obstacles. Most notable is the capital constraints within the region, including high levels of local debt and low levels of liquidity in the private sector, both of which are hindering the delivery of key projects. Private sector investors are uniquely placed to help fill this gap in the region if they can recognise and address the specific needs of each project and country. This also means that they are able to appropriately price the inherent risks of doing business in Latin America."
Fernandez agrees, noting that successful investment in Latin American infrastructure requires technical, financial and government expertise that is specific to the region.
“Companies participating in Latin American infrastructure projects can encounter a plethora of regulatory, political and financial hurdles that investors might have not experienced in other markets," he says.
“Completing the project in a way that yields a positive outcome for the stakeholders and country, and an acceptable return on invested capital, requires the ability to untangle complex situations and create innovative solutions to often unforeseen problems."
An example is the recently completed Norte III combined cycle gas plant in Northern Mexico, which created approximately 2,000 full-time jobs at peak construction while providing power to more than 500,000 homes and businesses in the area.
Throughout Latin America, it is expected that increasing investments in infrastructure and energy, especially through new sources of private capital, will create significant opportunities for local communities in the immediate future while laying the foundation for more sustained long-term economic growth.