Executive summary Latin America and the Caribbean (LAC) is rich in renewable energy resources and generates nearly 70% of its electricity from clean sources – significantly above the global average. However, to keep pace with rapidly growing electricity demand and meet regional climate goals, the region must modernize its grid infrastructure and attract greater investment. Over the past decade, LAC has seen significant growth in wind, solar and hydro power capacity, driven by supportive policies and declining technology costs. Despite this progress, barriers such as regulatory uncertainty, limited access to finance and insufficient grid integration hinder further expansion. Addressing these challenges is critical to attain the region’s full clean energy potential. Throughout 2025, the World Economic Forum has convened a public-private working group of energy and finance experts to identify challenges and propose solutions for unlocking investments and fostering regional partnerships to drive power system transformation in LAC (see Table 1). This collaborative process has focused on two complementary levels of analysis: –National power systems – Assessing country-level barriers and best practices for making electricity systems cleaner, more flexible and reliable, with a focus on regulation, investment, planning, permitting and distributed energy integration. –Regional integration – Building on analytical work led by the Inter-American Development Bank (IDB), exploring how enhanced cross- border cooperation can lower costs, boost resilience and improve renewable energy integration, through better regulatory alignment, interconnection infrastructure and regional platforms.Forward-looking regulation, innovative finance mechanisms, advanced technologies and regional cooperation are key to driving power system transformation in Latin America. Summary of solutions to accelerate power system transformation in LAC TABLE 1 Policy opportunities to accelerate grid deployment and transformationPolicy message 1 Improve coordination and holistic, long-term planning Align grid infrastructure planning with national energy, climate and environmental policy objectives. This can be done through improved coordination, transparency and integrated strategies that account for projected trends in electricity demand, generation mix and decarbonization targets. Policy message 2 Foster greater predictability and cost recovery Establish a stable and transparent regulatory framework that builds investor confidence and enables cost recovery for grid investments. Policy message 3 Supportive policy-making and incentive mechanisms Develop targeted incentive mechanisms, policy support and regulatory frameworks to promote investment in advanced technologies and grid modernization. Policy message 4 Streamline permitting and administrative processes Accelerate grid project deployment by promoting predictable, sound and agile permitting and approval processes. Innovative finance mechanisms to unlock grid investmentsSolution 1 A grid-dedicated fund Create specialized investment vehicles targeting transmission and distribution infrastructure. Advancing Latin America’s Power System Transformation 3

Advancing Latin America%27s Power System Transformation 2025