Three trends dominated the week: hydrogen, energy investment underway, and data centers. Although the region has unique assets to attract capital, it must resolve critical bottlenecks to turn these opportunities into reality.
Hydrogen and derivatives: US$301 billion (bn) at stake
Chile’s environmental evaluation service recommended the approval of a green ammonia project worth US$11bn, while Brazil has received proposals for more than US$290bn to invest in hydrogen, but adjustments are still needed to make the projects viable. On another front, Predator Oil & Gas could use surplus natural gas from Trinidad and Tobago to generate in situ electricity for hydrogen fuel cells to replace LPG, as well as for data centers.
Capital converges toward energy in Mexico
CFE announced an investment of US$525 million (mn) to modernize the power grid in Nuevo León, the epicenter of nearshoring in Mexico, and IFC is evaluating participating as an anchor investor with US$80mn in CFE Fibra E. In addition, hybrid schemes with CFE would attract global developers with bankable contractual terms, while interest is growing in behind-the-meter projects for data centers. For its part, Banco Multiva has identified 68 energy initiatives for more than US$4bn within a project portfolio of US$14.7bn that it will finance.
Vaca Muerta: investments face critical obstacles
Investment in projects that are applying for benefits under the RIGI regime in Argentina’s Vaca Muerta formation has reached US$116bn, but the scale required will lead to the search for co-investors. Phoenix Global partnered with Continental Resources after winning 6 blocks in Neuquén. The goal is to reach 100,000boe/d in five years with an outlay of US$4bn. More broadly, Fitch told BNamericas that transport bottlenecks, access to financing and unstable regulation are critical issues if the opportunities offered by Vaca Muerta are to be fully seized.
Brazil elections: a tight race
On August 16, the presidential campaigns began in Brazil with Lula and Flávio Bolsonaro as the main candidates, in a race that the polls show to be tight. According to Alexandre Pierantoni, head of corporate finance and M&A at Kroll for Latin America, the elections are a critical factor for investors who are analyzing decisions in this period due to volatility and political uncertainty. Both candidates converge on keeping oil and gas at the center of energy security, but diverge on the role of the State.
Data centers: investments and connections
KIO Networks foresees US$1.3bn in investment by 2030, driven by the expansion of its campus in Querétaro, Mexico. Meanwhile, two projects in Chile are requesting connection to the power grid for 1GW of data centers with construction planned for 2029, and Terranova is starting construction of a campus of AI-oriented data centers that will initially require US$500mn.
OTHER HIGHLIGHTED NEWS
ELECTRIC POWER
What Brazil’s main presidential candidates propose for the energy sector
Chile begins distribution and transmission reform process
Mexico attracts power investors with mixed contracts and “behind the meter”
Law firm Cleary Gottlieb says Venezuelan electricity law does not protect investors
Mining companies make strong headway in Peru’s free energy market
Why did electric vehicle sales in Brazil skyrocket?
A Chilean energy transition expert discusses pumped storage
Brazilian power sector sees progress in free market decree, but warns of regulatory challenges
Verano Energy details the IPP strategy behind Chile’s hybrid Observatorio project and sets its sights on storage in Colombia
OIL AND GAS
What is needed to make US$290bn in hydrogen projects in Brazil viable?
Vaca Muerta’s potential and risks
What Brazil’s main presidential candidates propose for the energy sector
How Brazil’s presalt will maintain its prominence in national oil and gas production
Contracts are not enough to normalize Venezuelan oil: Holland & Knight
The decisive day on permits is approaching for the US$11bn green ammonia project in Chile
Ecopetrol takes control of Brava Energia and makes its debut in Brazilian production
MINING AND METALS
Latin America does not choose between the US and China: it sells critical minerals to both
What lies ahead for Colombian mining: fewer obstacles, more copper and a struggle over the future of coal
Kast’s mega-reform: Three long-term investment levers in Chile
Traditional segments still dominate the appeal and mining operations in Brazil
Mining companies forge ahead in Peru’s free power market
Project finance in Latin America: the new rules of bankability
Peru aims to unlock US$40bn in mining investment
German steelmaker Waelzholz will invest US$65mn in its first plant in Mexico
El Escobal, Guatemalan US$500mn mine, still has no restart date
INFRASTRUCTURE
What explains the decline in optimism about infrastructure investment in Brazil?
Mexico will invest US$78bn in infrastructure through 2030
Mexican bank Multiva to finance US$15bn portfolio in energy and infrastructure
Hidroequinoccio launches tender with more guarantees via US$350mn in Ecuador
Argentina clarifies RIGI rules for rail infrastructure investment
Brazil prepares tenders for more than US$570mn for water infrastructure projects
POLITICAL RISK AND FRAMEWORK
August Political Risk Report
Project finance in Latin America: the new rules of bankability
Kast’s mega-reform: Three long-term investment levers in Chile
US faces an inconvenient truth in Latin America: China’s entrenched presence
The potential impacts of the elections for investors in Brazil
ICT
Energy groups seek startups and technology companies for projects
What recent private equity deals reveal about Latin American technology
Motive seeks growth from Paraguayan 5G to Mexican carriers
Towers in Latin America: who is growing, who is retreating and who is leaving the market
