Latin America&Caribbean Energy Transition 2025

Strong renewables and low import dependence anchor the LAC energy system – but stagnation, inefficiencies and risks persist.3.2 Opportunities and challenges across the region LAC stands at a crossroads – rich in clean energy potential yet held back by persistent structural barriers. The region ranks third globally in energy system performance, with above- average sustainability and near-average security and equity. Yet, transition readiness – which includes improvement in the enablers of systems performance such as regulation, infrastructure, human capital, innovation and finance – remains among the weakest worldwide.Over the past decade, the region’s system performance has improved by only 2%, while transition readiness has declined by 0.8%, as per ETI. With the gap slightly expanding in 2025, there is a clear need for structural reforms to improve enabling conditions and unlock the region’s potential to deliver secure, sustainable and equitable energy systems. The challenges underlying this imbalance – and the opportunities to overcome them – are explored in the following sections and summarized in the analysis of the region’s opportunities and challenges (see Table 1).Key points –Strong baseline potential, but underleveraged. Latin America enters the energy transition with one of the world’s cleanest energy profiles – a high share of renewables, low import dependence and moderate emissions intensity – yet these advantages are not fully translating into faster progress. –System performance holding, not advancing. The region continues to perform well in system performance dimensions such as sustainability (scores improved by 3% over the last decade and are 10.3% above the global average). However, deep structural issues – including affordability concerns, low clean tech exports, T&D losses and CO2 inefficiencies – constrain further progress. –Readiness bottlenecks undermine potential. Despite relatively strong system performance, generally low transition readiness – with scores declining by 0.8% over the past decade – reflects underdeveloped infrastructure, limited reform momentum and persistent gaps in finance innovation and human capital, all of which hinder the region’s ability to translate structural advantages into long- term progress. Energy Transition Readiness: Latin America and the Caribbean 13