WASHINGTON – The Inter-American Development Bank is preparing for its annual assembly next week in The Bahamas, a meeting at which special attention will be given to the region’s energy needs.
A recent report by the International Energy Agency calculates that Latin America and the Caribbean will need $4 trillion in investment through 2035 to be able to satisfy the region’s energy requirements, especially in terms of renewable energy.
“It’s an enormous quantity,” Ariel Yepez, the head of the IDB’s Energy Division, told EFE.
Yepez, who earlier was a senior economist at the World Bank and assistant director of economic planning for Mexican state oil company Pemex, added that although governments have an important role to play in project financing and implementation, the main burden will fall on the private sector.
“What is clear to us is that of all those incremental investment requirements, most of them are going to have to be realized by the private sector. And if (so), what do countries have to do so that investors have an appetite for participating in the energy sector?” he asked.
“We need to prepare or provide the space for institutions and regulatory frameworks to exist that calm investors down so that they can realize that the energy sector in the coming years will be attractive in terms of profitability and ... risk,” he added.
Along those lines, the IDB sees its role not only as providing the countries of the region with additional sources of financing, but also “helping the countries establish the institutional and regulatory frameworks” that foster investment.
During the April 7-10 assembly in Nassau, the IDB will devote special attention to the Caribbean, where energy prices are very high, a situation that makes it more difficult for the region to competitively produce goods and services.