The LAC energy integration has traditionally centred on bilateral exchanges but is now evolving towards comprehensive models that align tailored regulatory frameworks with coordinated infrastructure development. These efforts, implemented through regional interconnection systems (RIS), seek to establish sub-regional electricity markets and eventually interconnect them for greater regional integration. The IDB is instrumental in this process, serving as technical secretariat, key financier and facilitator of technical assistance. Key RIS initiatives include:3.3 Ongoing initiatives Next steps and solutions Across LAC, nations are working together to weave a stronger web of energy. Through RIS, countries aim to increase the flow of electricity by developing regional power markets and linking these markets together. In Central America, SIEPAC is seeking to expand its regional electricity market northwards, integrating with Mexico and Belize, and southwards, reaching Colombia in South America. This regional integration is accompanied by critical capacity expansion investments, such as the construction of a second SIEPAC circuit to increase transfer capacity to 600 MW and the planned Panama- Colombia interconnection project, designed to enable 400 MW of cross-border transmission.In the Andean region, SINEA is making great strides, laying the groundwork for new interconnection infrastructure. This new backbone will enable the Andean short-term electricity market to begin commercial operations. A key part of this is the Ecuador-Peru interconnection project, which is currently under construction. Projects like the Chile-Peru and Chile-Bolivia interconnections are next in line. At the same time, SINEA is strengthening the very foundation of this new market with the regulatory and normative frameworks already approved, which establish regional regulations. Further south, SIESUR has woven into its “roadmap” the initial design for a Southern electricity market. This vision is expected to significantly boost electricity exchanges in the future, aiming to surpass the current goal of 6%.Central America SIEPAC SIEPAC connects six countries – Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica and Panama – via a single 230 kV transmission line stretching nearly 1,800 km with a capacity of 300 MW.26 This infrastructure underpins the Central American regional electricity market (MER), which now supplies 6% of the region’s electricity demand. The MER features a robust institutional framework and supports active trading by over 300 private market participants, promoting competition and efficiency.Southern Cone SIESUR SIESUR brings together Argentina, Bolivia, Brazil, Chile, Paraguay and Uruguay, leveraging underutilized binational interconnections to increase electricity trade. Since its launch in 2018, electricity exchanges have quadrupled. The initiative is developing a Southern electricity market and prioritizing infrastructure upgrades to enhance grid reliability and further expand cross-border energy flows, capitalizing on the region’s diverse renewable energy resources. Caribbean Arco Norte The Arco Norte RIS aims to connect three Caribbean countries with Brazil, mirroring the governance models of other RIS initiatives. It focuses on advancing agreements and laying the groundwork for the Caribbean’s first regional electricity interconnection infrastructure, notably between Suriname and French Guiana, which will help boost energy access and regional cooperation in the Caribbean basin.Andean region SINEA SINEA aims to interconnect five countries across an extensive 7,000 km network to create a fully integrated electricity market. In 2024, the Andean Community approved regulations establishing the Andean short- term electricity market (MAERCP), strengthening market governance and operational coordination. Significant progress has been made, with financing secured for the Ecuador-Peru 500 kV transmission line (600-MW capacity), while feasibility and design studies are underway for Peru- Chile and Chile-Bolivia interconnections, which will improve supply security and optimize resource complementarity. Advancing Latin America’s Power System Transformation 17

Advancing Latin America%27s Power System Transformation 2025