Over the past two decades, Latin America has experienced significant growth in renewable energy, with Brazil, Chile and Mexico leading the charge. These nations capitalised on declining renewable energy costs to efficiently scale up production, contributing to the region’s energy transition. However, the lack of robust transmission infrastructure poses a bottleneck issue, limiting the effective distribution of clean energy.

According to the International Energy Agency (“IEA”), global clean energy investment exceeded USD 2 trillion in 2024, up from USD 1.8 trillion in 2023. Yet, Latin America needs over USD 250 billion annually to meet its infrastructure requirements, far outpacing the USD 760 billion in private capital it has attracted over the last 30 years, as estimated by the Inter-American Development Bank (“IADB”). “Investments in electricity grids in Latin America will need to triple by 2030 or even sextuple by 2050 to meet climate targets,” a former electricity sector manager noted. “This is not only a challenge but also a great opportunity to attract foreign investment and cutting-edge technologies.”

“Investments in electricity grids in Latin America will need to triple by 2030 or even sextuple by 2050 to meet climate targets... This is not only a challenge but also a great opportunity to attract foreign investment.”

Former manager of a public entity in the electricity sector, Colombia

The urgency of transmission expansion is particularly evident, “like Brazil, other major economies in Latin America also face a desperate need to invest in electricity transmission infrastructure,” retorted the former manager. Brazil’s reliance on hydropower leaves it vulnerable to drought-induced energy shortfalls. The expansion of the transmission network in Brazil is considered a matter of strategic interest which will require significant investments throughout the next decade,” cited a former Electrobras executive. The country’s 2024 transmission tender successfully secured USD 3.65 billion in investments, with Eletrobras Eletronorte and EDP among the major players.

The expansion of transmission infrastructure in Brazil is a critical priority, driven by the Ministry of Mines and Energy through initiatives like the Transmission Expansion Programme and the Long-Term Expansion Plan. “The 2025-2029 plan of the Ministry of Mines and Energy has budgeted almost BRL 7.5 billion, of which over BRL 5.5 billion will be invested in new facilities,” confided the former Electrobras executive. Aging equipment, often manually monitored and maintained, leads to high operational costs and frequent energy bottlenecks.

In 2024, Brazil awarded significant contracts worth BRL 2.5 billion in April and BRL 3.3 billion in September for extending transmission lines and substations, particularly to enhance connections between the Northeast and Southeast regions. To streamline the process, the Ministry of Mines and Energy has consolidated the 2025 tenders into a single auction scheduled for October 15, with further tenders expected in April and October 2026.

The need for transmission infrastructure investment is mirrored across other major Latin American economies, where outdated systems and limited capacity hinder the energy transition. Similar to Brazil, Colombia has also taken steps to modernise its grid through its 2022-2036 Transmission Expansion Plan, with projects targeting regions like La Guajira to connect wind and solar resources to consumption centres. “Among the most relevant tenders in the short and medium term are projects in strategic regions such as La Guajira, Cesar, Magdalena, Chocó, Norte de Santander, Córdoba and Sucre,” reported a consultant in the public and private sector.

Key stakeholders like Interconexión Eléctrica (“ISA”), a subsidiary of the Ecopetrol Group, are positioned to lead these efforts, as evidenced by their success with the Magangué project. Companies like Celsia have also shown a growing interest in strengthening their role in the sector. International firms, “including BlueFloat Energy, Copenhagen Infrastructure Partners and PowerChina, have expressed potential involvement, particularly in transmission infrastructure critical to integrating renewable energy into the grid,” reported the consultant. Colombia’s regulatory framework, featuring mechanisms like “fast track,” combined with governmental support, “makes it an attractive environment for both domestic and international investment,” added the consultant.

“[Colombia’s regulatory framework] makes it an attractive environment for both domestic and international investment.”

Consultant in the public and private sector, Colombia

The rapid growth of non-conventional renewable energies, such as solar and wind, “puts considerable pressure on the development of transmission infrastructure in Colombia.” The Energy and Gas Regulatory Commission (“CREG”) has taken steps to optimise capacity on existing lines, as seen in Antioquia, where 1,060 MW of capacity has been freed.

Overall, “the short and medium term for transmission lines in Colombia will be marked by an imperative need for expansion and modernisation.” The former public electricity sector manager continued, “This not only responds to the growth of renewable energies but also seeks to ensure a reliable, efficient and sustainable electricity supply in the near future.” Let’s hope Latin America can sustain its renewable energy growth.