Executive summary Latin America and the Caribbean (LAC) has some of the world’s most favourable conditions and potential for clean energy leadership, but realizing this promise depends on converting structural advantages into system-wide, future-ready progress through reform and regional action. Its solar and wind resources are among the strongest in the world, and renewables already account for around 70% of electricity generation (with hydropower contributing 52.5%); in transport, biofuels are twice as prevalent as the global average; fossil fuels represent a smaller share of total energy use than elsewhere and the region is a vital supplier of critical minerals – accounting for 25% of global critical mineral production. The region also shows strong potential to develop new green industries (including hydrogen), supported by rising clean energy deployment and associated job creation. However, regional progress remains uneven and is not yet at the pace of global change. According to this year’s Energy Transition Index (ETI) by the World Economic Forum, which benchmarks 118 countries on 43 indicators for energy system performance and transition readiness, LAC ranks third out of six global regions but sits below the global average score. Crucially, over the past 10 years, the region’s overall score has barely improved – up just 1.2%, while many other regions record significantly higher gains. Many countries in the LAC are “dual energy- dependent”, simultaneously exporting crude and coal while importing gas and refined oil, leaving them exposed to volatility in both pricing and supply. Structural challenges – from infrastructure bottlenecks to fragmented policies, limited innovation and weak financing – highlight the critical areas where focused reform and investment can unlock the region’s full potential. On the positive side, renewable generation capacity has expanded to over 366 GW (gigawatts), fossil fuel subsidies have been cut by 42% since 2016, and pioneering countries such as Brazil, Uruguay, Chile and Costa Rica show how countries can progress faster on renewables. Yet investment levels remain far below what is needed: despite rising clean energy investments projected to reach $70 billion in 2025 – a 25% increase since 2015 – the region attracted only 5% of private clean energy investment globally in 2024, against requirements of $150 billion annually by 2030. The Energy Transition Readiness Assessment (ETRA) provides a data-driven framework to track progress and identify priorities built on the ETI. It highlights four strategic goals for the region: Goal 1 Secure, resilient and integrated systems. Goal 3 Future-proof industrial ecosystems. Goal 2 Diversified, low-carbon energy mix. Goal 4 Improved efficiency and productivity. Key findings System performance, which measures energy security, equity and sustainability, remains stable, with strong sustainability scores, though continued momentum is needed in equity and security. The region’s sustainability advantage is backed by renewables, which make up 70% of electricity generation (as opposed to 49% globally) and biofuels at 10% of transport demand (twice the global average). Yet equity risks are rising: 78 million people still lack access to clean cooking while energy security scores have improved by only 0.2% over the past decade. Transition readiness, which measures a country’s ability to enable and sustain ongoing transition progress, offers the greatest opportunity for improvement. Despite resource advantages, the region scores 31% below the global average on finance and investment. Infrastructure and innovation also lag, with transmission and distribution (T&D) losses averaging 13.5% and clean tech research and development (R&D) remaining underfunded – limiting commercialization and scale-up.Transition pathways are diverging across countries and dimensions. ETI scores range from 44 to 67 with 2025 growth rates varying from -1.8% to 5.9%. Only 26% of countries advanced simultaneously in equity, security and sustainability, highlighting fragmentation and uneven progress across the region. New opportunities are emerging. Clean hydrogen and fuels, critical minerals, digitalization and advanced nuclear technologies offer pathways to industrial renewal, but only if backed by clear strategies, investment and institutional capacity. The road ahead To turn natural advantages into transformative impact, the region must achieve a few clear milestones – expanding renewable generation, securing universal access to clean cooking fuel, developing storage and grid integration, advancing sustainable biofuels and improving efficiency. These priorities will require action across four pillars: stronger policy frameworks, deeper regional integration, scaled financing partnerships and greater investment in innovation and skills. Energy Transition Readiness: Latin America and the Caribbean 4

Latin America&Caribbean Energy Transition 2025