Financing the Energy Transition in Latin America and the Caribbean (2013–2022)

Fossil Renunciation or Green Indebtedness?

Abstract

This article analyzes the structure, distribution, and trends of energy financing in Latin America and the Caribbean between 2013 and 2022. Drawing on the energyfinance.org database and semi-structured interviews with energy sector specialists, it examines the amounts allocated to fossil fuel and clean energy projects, as well as the main financial mechanisms used. The findings suggest that, despite recent growth in investment in clean energy, dynamics persist that sustain a significant share of financing directed toward fossil fuels, reflecting the inherent tensions of the region's energy transition. The study also identifies a growing process of financialization of energy development, with relevant implications for both economic and environmental sustainability. In this context, the article argues that, while the regional energy transition shows gradual progress, its evolution remains volatile and faces the challenge of redefining the sources and conditions of financing to consolidate a structural shift toward low-carbon models.