Research on Central and South  
American Renewable Energy  
Development and Investment  
( B r i e f V
e r s i o n )  
Global Energy Interconnection  
Development and Cooperation Organization  
(GEIDCO)  
Research on Central and South American Renewable Energy Development and Investment  
PREFACE  
Energy is an important foundation for economic and social  
development. Mankind uses energy, historically we have converted  
energy sources from firewood to fossil such as coal, oil, and natural gas,  
to renewable energy such as hydro, wind and solar energy, every change  
is accompanied by a huge leap in productivity and major progress in  
human civilization. Energy, as the driving force for the development of  
modern society, contributes to the nation’s economy and its citizens’  
interactive dynamic, as well as to their welfare. The massive  
development and use of traditional fossil energy has led to increasingly  
prominent problems such as resource shortages, environmental  
pollution, and climate change, which seriously threaten human survival  
and sustainable development. In essence, the core of sustainable  
development is clean development. The key is to promote renewable  
energy, and replace fossil energy with renewable energy such as solar,  
wind, and hydropower.  
Scientific and accurate quantitative assessment of resources is the  
critical foundation for large-scale development and utilization of  
renewable energy. At present, the globally installed capacity of hydro,  
wind and solar power has exceeded 30% of the installed capacity of  
power sources. Although some achievements have been made in the  
development of renewable energy, there is still potential for it to expand.  
Therefore, it is of great importance to conduct a fine assessment on  
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Research on Central and South American Renewable Energy Development and Investment  
resource reserves. On the basis of establishing and improving the global  
renewable energy resources database, the Global Energy  
Interconnection Development and Cooperation Organization (GEIDCO)  
has established an assessment system and digital fine assessment  
models for renewable energy resources. These models carry out  
systematic calculation and quantitative assessment of theoretical  
potential, technical potential installed capacity and economic potential  
installed capacity of hydro, wind and solar energies from a global  
perspective. An achievement of the Global Renewable-energy  
Exploitation ANalysis (GREAN) platform has been made, thereby the  
accuracy and timeliness of global renewable energy resources  
assessment will be effectively improved, subsequently providing an  
important support for large-scale development and utilization of  
renewable energy in relevant countries and regions.  
Systematic and efficient macro site selection of power bases is an  
important prerequisite for large-scale development and utilization of  
renewable energy. The site selection of renewable energy power bases  
is related to the cost-effectiveness of power station development, which  
crucially contributes to economic development and the efficient  
utilization of renewable energy. There are many factors affecting the  
site selection of power bases, hence the site selection analyses and  
decision-making process are convoluted. The desk top study of site  
selection is often limited by the integrity and accuracy of data. Site  
selection must rely on site surveys, which requires a huge amount of  
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Research on Central and South American Renewable Energy Development and Investment  
manpower, financial resources and time. By taking into account factors  
such as global topography and terrain elevation, land covers, water  
systems, natural reserves, geology and historical seismic activity  
frequency, power supply and power grid, population and economy,  
GEIDCO has developed a set of basic database, models and tools for  
macro site selection for renewable energy power bases which  
significantly increase the breadth and depth of data collection and  
analysis processes, thereby, greatly improving the accuracy, economy  
and effectiveness of the desk top study of site selection, and achieving  
systematic achievements in promoting the development of global  
renewable energy resources. The data collected and analyzed by such  
models and tools are referred as “Reference Book” and “Data Manual”  
and used during the world's energy strategy research and policy  
formulation.  
Focusing on the world’s resource assessment and base  
development of all continents, GEIDCO has prepared a series of  
scientific reports on renewable energy development and investment  
globally, specifically in continents such as Asia, Europe, Africa, North  
America, Central and South America and Oceania.  
This report is one of the renewable energy research series focusing  
on Central and South America, which fully shows the achievements in  
the assessment of renewable energy resources and the site selection of  
large-scale power bases in Central and South America. In Chapters  
1, 2 and 3, the resource assessment and base development research of  
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hydro, wind and photovoltaic power in Central and South America were  
completed by digital methods. Firstly, the methods, models and data of  
resource assessment and site selection are introduced respectively. In  
terms of hydropower, the theoretical potential of hydroenergy resources  
in major river basins of Central and South America is calculated, and  
cascade hydropower stations development schemes of major reaches  
are proposed. In terms of wind and photovoltaic power, on the basis of  
comprehensive calculation and analysis of the main factors affecting  
centralized development, the theoretical potential, technical potential  
installed capacity and economic potential installed capacity of wind  
power and photovoltaic power in all countries and regions of Central  
and South America have been calculated. Using the GREAN platform,  
the site selection and layout of large-scale onshore wind power bases  
and large-scale solar photovoltaic power bases in Central and South  
America are proposed, and the assessment of development conditions,  
development scale and the calculation of technical and economic  
indicators are completed. In Chapter 4, based on the development trend  
of energy and electricity supply and demand in Central and South  
America, the power transmission direction and mode of large-scale  
renewable energy bases are studied and analyzed by coordinating the  
regional, trans-regional and trans-continental power consumption  
markets. Chapter 5 reviews the energy policies and investment status of  
major countries in Central and South America, analyzes the typical  
investment modes of renewable energy exploitation projects, conducts  
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case studies in the development schemes of large- scale hydro, wind  
and solar power bases in Central and South America, and proposes  
suggestions on policies and investment modes to speed up clean  
development in Central and South America.  
The Global Renewable Energy Development and Investment  
series of reports made by the GEIDCO are committed to providing  
guidance and reference for the large-scale development and utilization  
of renewable energy around the world and accelerating the  
implementation of clean alternatives on the energy supply side. This  
report provides guidelines and acts as a reference guide for government  
departments, international organizations, energy enterprises, financial  
institutions, universities and relevant individuals who take part in  
renewable energy resource assessment, strategic research, project  
development, international cooperation, etc. However, due to the time  
constraints for data collection and report research writing timeframe,  
the contents may be incomplete. Comments and suggestions are  
welcome for further improvements.  
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Research on Central and South American Renewable Energy Development and Investment  
CONTENTS  
ꢀ
1ꢀ Hydroenergy Resources Assessment and Development......7ꢀ  
1.1ꢀ RESTRICTIVE FACTORS ANALYSIS............................ 8ꢀ  
1.2ꢀ RESOURCE ASSESSMENT .................................. 10ꢀ  
1.3ꢀ BASE DEVELOPMENT .................................... 12ꢀ  
2ꢀ Wind Energy Resources Assessment and Development.....15ꢀ  
2.1ꢀ RESTRICTIVE FACTORS ANALYSIS........................... 15ꢀ  
2.2ꢀ RESOURCE ASSESSMENT .................................. 18ꢀ  
2.3ꢀ POWER BASES DEVELOPMENT............................... 24ꢀ  
3ꢀ Solar Energy Resources Assessment and Development....26ꢀ  
3.1ꢀ RESTRICTIVE FACTORS ANALYSIS........................... 26ꢀ  
3.2ꢀ RESOURCE ASSESSMENT .................................. 29ꢀ  
3.3ꢀ POWER BASES DEVELOPMENT............................... 34ꢀ  
4ꢀ Outbound Transmission of Large-scale Renewable Energy Bases  
37ꢀ  
4.1ꢀ EASTERN SOUTH AMERICA ................................ 37ꢀ  
4.2ꢀ SOUTHERN SOUTH AMERICA................................ 39ꢀ  
4.3ꢀ WESTERN SOUTH AMERICA ................................ 40ꢀ  
4.4ꢀ CENTRAL AMERICA ..................................... 41ꢀ  
5ꢀ Policy Environment and Investment and Financing Suggestions  
44ꢀ  
5.1ꢀ OVERVIEW OF COUNTRIES IN CENTRAL AND SOUTH AMERICA ......... 44ꢀ  
5.2ꢀ INVESTMENT AND FINANCING PROPOSAL....................... 49ꢀ  
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Research on Central and South American Renewable Energy Development and Investment  
1 Hydroenergy Resources Assessment and Development  
Central and South America is rich in hydroenergy resources, and  
the total amount is among the highest in the world with great  
development potential. In this report, the digital assessment and  
calculation of hydroenergy resources in basins of such nine major rivers  
as Amazon River, Tocantins River, Orinoco, San Francisco, Parana,  
Neuquen-Negro, Patuca, Coco and Motagua River are carried out, and  
the total theoretical potential of hydroenergy is about 6551.9 TWh/a.  
Considering resource characteristics and development conditions, and  
using the digital platform, the report further carried out the research on  
the development scheme of 14 large-scale hydropower bases in 4 river  
basins, including the Orinoco River, Tocantins River, Amazon River  
and Motagua River Basin, and the layout scheme of 74 cascade  
hydropower stations and development scheme of large-scale  
hydroenergy projects are proposed for the reaches to be developed with  
rich hydroenergy resources, with the total installed capacity of 65.43  
GW and the annual power generation of 330.23 TWh. The research  
results will strongly promote the steady growth of energy production  
and consumption in Central and South America. Countries will  
accelerate the pace of energy transition, actively develop renewable  
energy, promote integration of transnational power grids, actively  
respond to climate change, and strive to build a green and low-carbon  
development pattern.  
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1.1 Restrictive Factors Analysis  
In terms of water system distribution, there are many water  
systems in Central and South America, mainly distributed in central,  
eastern and southern South America. According to the analysis, there  
are 30 first-class rivers with a basin area of more than 3×104 km2 in  
South America and of 2×104km2 in Central America. The total basin  
area is 15.36 million km2, accounting for 84% of the total area of  
Central and South America. The distribution of major river systems in  
the whole continent is shown in Figure 1-1.  
In terms of hydrological data, the Central and South American  
continents studied in the report, based on the basic data of the Global  
Runoff Data Center which contains the observation data from more than  
800 hydrological stations, also cover some river basins along the Pacific  
coast and the Caribbean in addition to the above 30 first-class river  
basins.  
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Figure 1-1 Distribution of Major Rivers in Central and South America  
In terms of geological conditions, data about the distribution of  
geological faults and historical seismic activity frequency are important  
reference factors for the development and site selection of large-scale  
hydropower bases. Generally speaking, regions with tectonic plate  
boundaries, geological faults and high frequency of historical  
earthquakes are not suitable for the construction of large-scale  
hydropower projects. Geological faults in Central and South America  
are mainly distributed in coastal areas, and areas with high frequency  
of historical earthquakes are mainly distributed in the Pacific coastal  
areas, west of the Andes. The distribution of main geological faults and  
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the historical seismic activity frequency in Central and South America  
are shown in Figure 1-2.  
Figure 1-2 Distribution of Major Geological Faults and Historical Seismic Activity Frequency  
in Central and South America  
1.2 Resource Assessment  
Overview of Hydroenergy Resources. Central and South  
America has a total of 10,380 rivers with theoretical reserves of 50 GWh  
or more of hydropower resources, and a total of 9350 TWh/a of  
hydropower resources, accounting for 20.2% of the global total.  
Hydroenergy development potential in Central and South America is  
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mainly distributed in the Amazon River, Tocantins River, Orinoco River  
and other large-scale basins. Digital assessment and calculation of  
hydroenergy resources in nine major river basins in Central and South  
America, including Amazon River, Sao Francisco River, Tocantins River,  
Parana River, Orinoco River, Neuquen-Negro River, Coco River, Patuca  
River and Motagua River, are carried out. The basins cover an area of  
about 12.10 million km2, covering the main hydroenergy resources to be  
developed. Their distribution is shown in Figure 1-3.  
According to the calculation of the digital assessment platform, the  
total theoretical poten,yhtial of the nine basins in Central and South  
America are about 6552 TWh/a.  
According to the national statistical assessment carried out by the  
countries involved in the basin, the theoretical hydroenergy potential in  
Central and South America is mainly distributed in 11 countries such as  
Brazil, Peru, Venezuela, Colombia, Bolivia, Argentina, Paraguay and  
Honduras, among which the theoretical hydroenergy potential in Brazil  
is the highest, at 3583.38 TWh/a.  
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Figure 1-3 Distribution of Nine Major River Basins in Central and South America  
1.3 Base Development  
Considering resource characteristics and development conditions,  
Central and South America will, in the future, focus on the development  
of 14 Large-scale Hydropower Bases in four river basins, including  
Orinoco River, Tocantins River and rivers flowing into Amazon River  
such as Tapajos River, Maranon River, Madeira River and Ucayali  
River, as well as Motagua River. Based on the digital platform, the  
research on the base development scheme has been carried out for river  
basins, and the cascade hydropower station layout scheme of the reach  
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to be developed with rich hydropower resources has been proposed, and  
the site selection study of large hydropower projects has been  
completed. The overall layout of large-scale hydropower bases in South  
America is shown in Figure 1-4.  
Figure 1-4 General Layout of Large-scale Hydropower Bases in Central and South  
America  
Measurement and calculation show that the key reaches of the four  
river basins involve a total of 74 cascade hydropower stations to be  
developed, with a total installed capacity of 65.43 GW and an annual  
power generation of 330.23 TWh. According to the long-term scheme,  
the development scale of hydropower bases in the four river basins is  
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expected to exceed 140 GW.  
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2 Wind Energy Resources Assessment and Development  
Central and South America is rich in wind energy resources and  
holds great development potential. The report assessed countries and  
regions in Central and South America, and calculated that the  
theoretical potential of wind energy resources is up to 184.0 PWh/a, and  
the installed capacity suitable for centralized development is 6783.5  
GW, which is mainly distributed in southern Argentina, northeastern  
Brazil and northern Colombia near the Caribbean Sea in northern South  
America, with 19.8 PWh of annual power generation. However, the  
current Wind power installed capacity is still less than one ten-  
thousandth of the technical potential installed capacity. Considering  
the characteristics and development conditions of resources, the site  
selection and development schemes of such 9 large-scale wind power  
bases as Bahia in Brazil, Rio Negro in Argentina and Boaco in  
Nicaragua were studied and the main technical and economic indicators  
were proposed by using the digital platform, with a total installed  
capacity expected to be 99.70 GW. The research results will assist  
the development and utilization of wind energy resources in Central and  
South America, enhance the confidence in infrastructure investment of  
wind power  
in Central and South America, and promote the clean  
development process of energy resources in Central and SouthAmerica.  
2.1 Restrictive Factors Analysis  
In terms of wind speed distribution, Central and South America  
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holds great potential for wind energy development. The distribution of  
wind speeds is shown in Figure 2-1. In terms of wind speed, some  
regions in countries with rich wind resources and an annual average  
wind speed of more than 6 m/s, including Argentina, Uruguay, Bolivia  
in the south of South America, Brazil in the east of South America and  
Nicaragua in Central America, are conducive to the development of  
large-scale wind power bases.  
Figure 2-1 Distribution of Wind Speeds in Central and South America  
In terms of the distribution of transportation facilities, the  
higher the level of development of transportation facilities and the  
wider the distribution of road networks in areas rich in wind energy  
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resources, the more favorable for the development and construction  
of large-scale wind power bases, facilitating the transportation of  
engineering equipment and materials into the site, and improving the  
base development economy. In order to study the economy of wind  
power resources development, it is necessary to comprehensively  
analyze and calculate the distribution of transportation facilities. Figure  
2-2 is a schematic diagram showing the distribution of main roads and  
railways in Central and South America. In terms of roads, based on the  
statistics of the global basic information database, in Central and South  
America, The total mileage of High Way is about 10×104 km, and the  
total mileage of Road exceeds 90×104 km, which is basically spread all  
over Central and South America. Specifically, the Amazon Rain Forest  
areas in the north of SouthAmerica, rarely have roads to cross, and most  
areas are more than 200 km away from the nearest main road. There are  
few road transportation facilities in northwestern Brazil, southern  
Colombia and southern Venezuela. In terms of railways, based on the  
statistics of global basic information database, the total mileage of  
railways in Central and South America is about 9×104 km, mainly  
distributed in Argentina and Chile in the south of South America, Brazil  
along the Atlantic coast in the east of South America, Colombia and  
Ecuador along the Atlantic coast in the west of South America, Cuba in  
the north of the Caribbean and other countries. Generally speaking,  
Central and South America has less railway mileage, leaving huge  
development space.  
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Figure 2-2 Distribution of High Ways and Railways in Central and South America  
2.2 Resource Assessment  
In terms of theoretical potential，according to the measurement  
and calculation of wind speed data at the height of 100 m, the theoretical  
potential of wind energy resources in Central and South America are  
184.0 PWh/a, accounting for 9% of the global total. In terms of  
distribution, the theoretical potential in Brazil in the east, Argentina in  
the south, Bolivia, Chile and Colombia in the west of South America is  
higher.  
In terms of technical potential installed capacity ， after  
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comprehensive consideration of resources and various technical  
constraints, the technical potential installed capacity of wind power  
suitable for centralized development in Central and South America is  
estimated to be 6783.5 GW, accounting for 5% of the global total, and  
the annual power generation is about 19.8 PWh/a.  
In terms of distribution, the technically exploitable wind energy  
resources in Central and South America are mainly distributed in  
southern Argentina, northeast Brazil and southeast coastal areas of  
Uruguay, accounting for more than 80% of the continent’s total. Except  
for plateau areas in southern Argentina, other areas are basically below  
1000 m above sea level, mainly with herbaceous vegetation, bare  
ground and a small amount of shrubs. Except for few conservation areas  
in northeastern Brazil, most of the areas are very suitable for the  
construction of large-scale wind power bases. Most areas of central and  
western South America, such as northwestern Brazil, northeastern  
Peru, eastern Ecuador, Colombia and southern Venezuela, have poor  
wind resources and dense tropical rain northeastern Argentina  
Agricultural arable land is widely distributed in Brazil Southern  
Nicaragua in Central America is also rich in wind energy resources, but  
the terrain is steep, mostly covered with tropical rain forest, the above  
countries and regions are not suitable for building centralized wind  
power bases. On the whole, excluding the influence of resource  
endowments, land coverage, protected areas and other factors, the land  
areas in Central and South America that have the conditions for  
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concentrated development and construction of wind power bases are  
relatively limited, but the southern region of Argentina has excellent  
conditions for centralized development of wind power due to various  
technical conditions.  
The installed capacity per unit land area and its annual power  
generation are important indicators to characterize the technically  
exploitable resource conditions of wind power  
in a region.  
However, the installed capacity is greatly affected by the terrain slope.  
In comparison, the ratio of annual power generation to installed  
capacity, that is, the number of installed capacity full-load hours  
(capacity factor), can better reflect the advantages and disadvantages of  
regional resources, development conditions and technology. It also can  
be combined with the installed capacity per unit area as a judgment  
standard to measure the advantages and disadvantages of wind power  
resources in a region. Please refer to Figure 2-3 for the distribution of  
technical available areas for wind power generation in in Central and  
South America and their full-load hours.  
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Figure 2-3 Distribution of Wind Power Technical Available Areas in Central and South  
America and Their Full-load Hours  
According to technical indicators, the average full-load hours for  
the technical potential installed capacity of continent-wide wind power  
are about 2916 hours (with an average capacity factor of about 0.33).  
Among them, the full-load hours of wind power are about are 3500-  
4500 hours in southern Argentina, the Pacific coast of southern Chile,  
northeastern Brazil, the Caribbean coast of northern Colombia, the  
Caribbean coast of northern Venezuela, and the coastal waters around  
the Caribbean Sea. The development conditions are favorable, with the  
maximum value occurring near Santa Cruz in southern Argentina.  
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In terms of development cost，according to the estimation of the  
cost level of onshore wind power technology and equipment by 2035,  
considering the transportation and grid infrastructure conditions, The  
average development cost for centralized wind power development in  
Central and South America is 3.18 cents, and the average LCOE for  
centralized wind power development in countries of Central and South  
America is between 1.98 and 7.72 cents/kWh. According to the current  
global average tariff level of about 8 cents, nearly all the technical  
potential installed capacity of wind power in Central and SouthAmerica  
meets the economic requirements. Under the condition of global  
average tariff level of about 5 cents, the calculation shows that the  
economic potential installed capacity of wind power in Central and  
South America is expected to be 6.4TW, according to the cost level by  
2035, accounting for 95% of technical potential installed capacity. See  
Figure 2-4 for the distribution of development costs for wind power  
resources in Central and South America.  
In terms of economic indicators by country of wind power  
development, countries and regions with excellent resource  
conditions and relatively good transportation and grid infrastructure  
conditions have relatively low cost and better economy for wind  
power development. On the whole, Most of the wind power  
resources that can be developed in Central and South America  
are relatively economical, but the highest electricity costs for wind  
power development in 17 countries and regions including Bolivia,  
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Guyana, Suriname, and Cuba are higher than 8 cents, From the  
perspective of the most economical development regions, the lowest  
LCOE of wind power in Colombia, Brazil, Chile, Argentina,  
Nicaragua, Costa Rica 9 countries is less than 2.5 cents, with good  
development economy, with the lowest development cost occurring in  
the west of Gobernadorgregores, Santa Cruz in southern Argentina, at  
1.63 cents.From the perspective of the average economic level, the  
average development cost in Colombia is the lowest, at 2.41 cents.  
Figure 2-4 Distribution of Wind Power Development Costs in Central and South America  
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2.3 Power Bases Development  
According to the assessment results of wind energy resources in  
Central and South America, considering the characteristics of resources  
and development conditions, large-scale wind power bases in Central  
and South America should be laid out in regions with high technical  
indicators and low development cost. According to the overall local  
electricity demand and the layout of the main strategic power  
transmission channels of energy interconnection in Central and South  
America, in the future, Bahia and Pallai wind power bases in Brazil will  
be developed in the east of Central and South America, with a  
development scale of 40 GW by 2035. Valledupar wind power base in  
Colombia will be developed in the west of Central and South America,  
with a development scale of 10 GW by 2035. Such bases as Curuguaty  
in Paraguay, Tacuarembo in Uruguay, Rio Negro in Argentina, Chubut  
in Argentina and Santa Cruz in Argentina will be developed in the south  
of Central and South America, with a development scale of 49 GW by  
2035. In Central America, the focus will be on the development of  
Boaco wind power base in Nicaragua, with a development scale of 700  
MW by 2035.  
Based on the digital site selection model and software, the above  
nine wind power bases are studied with regard to the development  
conditions, installation scale, engineering assumption, power  
generation characteristics and investment level, and a preliminary  
development scheme was put forward. The total installed capacity of  
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Research on Central and South American Renewable Energy Development and Investment  
the above nine wind power bases is about 99.70 GW and the annual  
power generation will be 364.43 TWh/a. According to the long-term  
scheme, the total development scale is expected to exceed 207 GW in  
the future. According to the forecast results of cost for onshore wind  
power in Central and South America by 2035 and investment estimation  
based on the basic situation of the project, the total investment of wind  
power bases in Central and South America is about 88.556 billion USD,  
and the LCOE range is 1.82-3.47 cents /kWh. See Figure 2-5 for the  
overall layout of large-scale wind power bases in Central and South  
America.  
Figure 2-5 Layout of Large-scale Wind Power Bases in Central and South America  
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3 Solar Energy Resources Assessment and Development  
Central and South America is rich in solar energy resources and  
holds great development potential. The report assessed countries and  
regions in Central and South America, and calculated that the  
theoretical potential of solar energy resources is about 34,295.3 PWh/a,  
and the installed capacity suitable for centralized development is about  
277.4 TW, which is mainly distributed in Atacama Desert and its  
surrounding areas in the southwest, Atlantic coastal areas in the  
northeast and southern coastal areas of the Caribbean Sea in the  
northwest of South America, with 504.7 PWh of annual power  
generation. Considering the characteristics and development conditions  
of resources, the site selection and development scheme of such 15  
large-scale photovoltaic power bases as Mariaelena Base in Chile and  
Atacama Base in Peru were studied and the main technical and  
economic indicators were proposed by using the digital platform, with  
a total installed capacity expected to be about 87.70 GW. The research  
results will assist the development and utilization of solar energy  
resources in Central and South America, enhance the confidence in  
infrastructure investment of photovoltaic power generation in Central  
and South America, and promote the clean development process of  
energy resources in Central and South America.  
3.1 Restrictive Factors Analysis  
In terms of Global Horizontal Irradiance distribution ，  
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Central and South America holds great potential for solar energy  
development, the distribution of global horizontal irradiance of solar  
energy in Central and South America is shown in Figure 3-1.  
Figure 3-1 Distribution of Global Horizontal Irradiance of Solar Energy in Central and  
South America  
The mean annual global horizontal irradiance of Venezuela and  
Peru in the west of South America, Brazil in the east, Bolivia, Chile,  
Argentina and other countries in the south, with good solar energy  
resources, is above 1800 kWh/m2, which is beneficial to the  
development of large-scale photovoltaic power bases.  
In terms of Land Covers distribution, from the perspective of  
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land resources suitable for large-scale development, forests,  
cultivated lands, wetland water bodies, urban areas and glaciers are the  
main restrictive factors of land cover affecting the centralized  
development of solar photovoltaic generation. Most areas in the  
southwest of South America are in tropical arid climate, with high  
temperature and drought all year round, and have the world’s “dry pole”,  
Atacama Desert which is the driest desert on Earth. Except for a small  
amount of land covered by herbaceous vegetation, the desert areas are  
all bare grounds, with favorable conditions for centralized development  
of solar energy resources. The main land covers in the east of Central  
and South America are herbaceous vegetation and shrubs, which are  
also suitable for the construction of large-scale photovoltaic power  
bases with favorable development conditions. From the perspective of  
land resources suitable for large-scale centralized development,  
herbaceous vegetation, shrubs and bare grounds are the main land  
covers suitable for photovoltaic resources development, and their  
distribution will directly affect the assessment and development of  
solar energy resources. Figure 3-2 shows the distribution of the above  
mentioned three land covers types that are suitable for centralized  
photovoltaic development in Central and South America.  
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Figure 3-2 Distribution of HerbaceousVegetation, Shrubs and Bare Grounds in Central and  
South America  
3.2 Resource Assessment  
In terms of theoretical potential，according to measurement and  
calculation, the theoretical potential of solar photovoltaic resources in  
Central and South America is 34295.3 PWh/a, accounting for about 17%  
of the global total. In terms of distribution, the theoretical potential in  
Brazil in the east, Chile and Argentina in the south, Venezuela and  
Colombia in the west of South America is higher.  
In terms of technical potential installed capacity ， after  
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comprehensive consideration of resources and various technical  
constraints, it is estimated that the scale suitable for centralized  
development of solar photovoltaic resources in Central and South  
America is 277.4 TW, accounting for about 11% of the global total, and  
the annual power generation is up to 504.7 PWh.  
In terms of distribution, photovoltaic resources in Central and  
South America are mainly concentrated along Atacama region, the  
southern coast of the Caribbean Sea and the Atlantic coast of Northeast  
South America. Chile, Argentina, Peru, Bolivia, Brazil and Venezuela  
account for more than 80% of the total amount of the continent. Except  
for Atacama region located in the Andes having a high altitude of up to  
6800 m, the above areas are basically below 2000 m above sea level.  
The Atacama region is mainly covered by bare ground, herbaceous  
vegetation and a small amount of shrubs. Except for the conservation  
areas in Argentina, Peru and Chile, most of the areas are very suitable  
for the construction of large- scale photovoltaic power bases. In western  
Central and South America, Ecuador, southern Colombia, and  
northeastern Peru are mostly dense tropical rain forests, poor  
irradiation conditions, and many protected areas, it is impossible to  
build large-scale photovoltaic bases; southeastern Brazil and  
northeastern Argentina are mostly farmland and cultivated land. The  
irradiation conditions are general, and the conditions for intensively  
building large photovoltaic bases are not available. Caribbean area in  
Central America is also rich in photovoltaic energy resources, but the  
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terrain is steep, mostly covered with tropical rain forest, and the  
available area is limited, so most countries are difficult to concentrate  
on building large-scale photovoltaic bases in large areas.  
Similar to the technical indicator of wind power, the ratio of annual  
power generation per unit land area to installed capacity, that is, the  
number of installed capacity full-load hours (capacity factor) is also a  
key parameter reflecting the advantages and disadvantages of regional  
photovoltaic resource technology development conditions. Please refer  
to Figure 3-3 for the distribution of technical available areas for  
photovoltaic power generation in Central and South America and their  
full-load hours.  
According to the technical indicators, the average full-load hours  
of technical potential installed capacity of photovoltaic power  
generation in the whole continent are about 1819  
(the average  
capacity factor is about 0.21), among which, the full-load hours of  
photovoltaic technology are above 2000 in northern and central Chile,  
western coastal and southern Peru, southwestern Bolivia, northwestern  
Argentina, northeastern Brazil, northern and central Venezuela,  
northern Colombia, northern and eastern El Salvador. The development  
conditions are favorable, with the maximum value occurring in  
Antofagasta in northern Chile, exceeding 2500 hours.  
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Figure 3-3 Distribution of Technical Available Areas for Photovoltaic Generation in Central  
and South America and Their Full-load Hours  
In terms of development cost，according to the estimation of the  
cost level of photovoltaic technology and equipment by 2035,  
considering the transportation and grid infrastructure conditions, the  
average development cost of centralized photovoltaics in Central and  
South America is 2.34 cents, and the average LCOE of centralized  
photovoltaic development in countries of Central and South America is  
between 1.84 cents and 5.39 cents. According to the current global  
average tariff level of about 8 cents, nearly all of Central and South  
America’s technical potential installed capacity meets the economic  
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requirements. Under the condition of global average tariff level of about  
3.5 cents, the calculation shows that the economic potential installed  
capacity of solar power in Central and South America is expected to be  
264.6 TW according to the cost level by 2035, accounting for 95% of  
technical potential installed capacity. See Figure 3-4 for the distribution  
of development costs for photovoltaic resources in Central and South  
America.  
Figure 3-4 Distribution of Development Costs for Photovoltaic Generation in Central and  
South America  
In terms of economic indicators of photovoltaic power generation,  
countries and regions with excellent resource conditions and relatively  
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good transportation and grid infrastructure have relatively low cost and  
better cost-effectiveness for photovoltaic power development. On the  
whole, the highest LCOE in most countries and regions of Central and  
South America is less than 8 cents, which indicates that Central and  
South America as a whole has good conditions for large-scale  
development. Among them, some regions of Venezuela, Argentina,  
Chile and other countries have extremely high LCOE costs, which are  
closely related to their local poor transportation and grid integration  
conditions.  
On average, Chile has the lowest average LCOE in countries,  
namely, 1.84 cents/kWh, and its lowest LCOE is 1.48 cents/kWh. From  
the point of view of the most economic development regions, Chile,  
Peru, El Salvador, Dominica, Cuba, Costa Rica, Jamaica, Guatemala,  
Brazil, Argentina, Bolivia, Venezuela, Panama, Uruguay, Nicaragua,  
Guyana, Paraguay, Belize, Haiti, Ecuador, Aruba (Netherlands),  
Trinidad and Tobago, Colombia, Honduras and other 24 countries have  
a minimum development cost of less than 2.5 cents/kWh and a good  
development economy. The lowest development cost is 1.48 cents/kWh  
in the south of Antofagasta, Chile.  
3.3 Power Bases Development  
According to the assessment results of solar energy resources in  
Central and South America, considering the characteristics of resources  
and development conditions, large- scale photovoltaic power bases  
should be laid out in regions with high technical indicators and low  
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development cost. According to the overall local electricity demand and  
the distribution of the main strategic power transmission channels  
of energy interconnection in Central and South America, in the future,  
three photovoltaic power bases, such as Elpunzon in Venezuela,  
Elcalvario in Venezuela and Atacama in Peru, will be developed in  
the west of South America, with a development scale of 14.00 GW by  
2035. Eight photovoltaic power bases will be developed in the south of  
South America, including Atacama in Bolivia, Huara in Chile, Lagunas  
in Chile, Qullagua in Chile, Mariaelena in Chile, Elmoreno in Argentina,  
Payogasta in Argentina and Cachi in Argentina, with a development  
scale of 43.00 GW by 2035. Three photovoltaic bases will be developed  
in the east of South America, including Angicos, Alfonsobzepra and  
Augusto-Severo in Brazil, with a development scale of 30.00 GW by  
2035. In Central America, the focus will be on the development of a  
photovoltaic power base in El Salvador, with a development scale of  
700 MW by 2035.  
Based on the digital site selection model and software, the  
report presents the development conditions, installation scale,  
engineering assumption, power generation characteristics and  
investment level of the above 15 photovoltaic bases, and puts forward  
a preliminary development scheme. The total installed capacity of the  
15 photovoltaic bases is about 87.70 GW and the annual power  
generation will be 179.84 TWh/a. According to the long-term scheme,  
the total development scale in the future is expected to exceed 203 GW.  
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According to the forecast results of photovoltaic cost in Central and  
South America in 2035 and investment estimation based on the basic  
situation of the project, the total investment of photovoltaic power  
bases in Central and South America is about 42.07 billion USD, and  
the LCOE range is 1.65-2.26 cents/kWh. See Figure 3-5 for the verall  
layout of large-scale photovoltaic power bases in Central and South  
America.  
Figure 3-5 Layout of Large-scale Photovoltaic Power Bases in Central and South America  
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4 Outbound Transmission of Large-scale Renewable  
Energy Bases  
Based on the tendency of energy and power supply and demand  
development in Central and South America and combined with the  
distribution and development layout of renewable energy and mineral  
resources, the regional, inter-regional and inter- continental power  
consumption markets are coordinated. Under the framework of energy  
interconnection in Central and South America, the power delivery  
direction and transmission mode of large-scale renewable energy bases  
are studied and analyzed in full consideration of factors such as the  
power delivery capacity of the bases, power transmission distance and  
the development of the power grid structure. The development of large-  
scale renewable energy bases is coordinated and effectively connected  
with the construction of domestic power grids and interconnection of  
cross-national power grids, to promote large-scale development,  
optimal allocation and efficient utilization of renewable energy, help  
Central and South America effectively deal with climate change, and  
accelerate the process of re-industrialization and regional integration.  
4.1 Eastern South America  
Eastern South America is rich in mineral, hydroenergy, wind energy  
and solar energy resources and has a solid industrial base. By  
implementing the guidelines and policies of increasing investment in  
infrastructure construction, accelerating the upgrading of traditional  
industries and promoting the development of strategic emerging  
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industries, it will have great development potential in the future and  
become the main load center in Central and South America. In the future,  
in addition to developing hydropower in the east of Amazon and wind  
power and solar power in the northeast of Brazil, it is necessary to  
vigorously strengthen the construction of intra- regional AC main grid  
and the construction of cross-national and inter-regional transmission  
channels, and receive a large amount of renewable energy such as  
hydroenergy, wind energy and solar energy from southern South America  
and western South America, to provide economical, reliable and  
diversified power supply for countries in the region. The long-term  
transmission scheme of the clean energy base in eastern South America  
is shown in Figure 4-1.  
Figure 4-1 Schematic Diagram of Long-run Transmission Scheme for Renewable Energy  
Bases in Eastern South America  
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4.2 Southern South America  
Southern South America has a relatively complete industrial  
system and strong talent competitiveness. It can rely on traditional  
advantageous industries (such as mining industry and metallurgical  
industry) and key economic zones to promote the transformation and  
upgrading of existing industries to large-scale industrial clusters with  
industries with cutting- edge technology and core competitiveness as  
the direction. In the future, the hydropower in the north of Bolivia, wind  
power in the south of Argentina and solar power in the north of Chile  
are suitable to be developed on a large scale in the southern South  
America. On the basis of meeting the power demand of Gran Buenos  
Aires in Argentina and Santiago Economic Belt in Chile, Brazil, the  
load center for inter-regional power transmission in eastern South  
America, will become an important renewable energy delivery base in  
Central and South America. The long-term transmission scheme of the  
clean energy base in southern South America is shown in Figure 4-2.  
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Figure 4-2 Schematic Diagram of Long-run Transmission Scheme for Renewable Energy  
Bases in Southern South America  
4.3 Western South America  
Western South America is rich in mineral resources, coal, oil and  
gas and hydroenergy resources, and its population is growing rapidly.  
In the future, by relying on regional advantageous industries such as  
mining industry and oil and gas industry, the guidelines and policies  
could be introduced to enhance the industrial base and enrich the  
industrial system, strengthen industrial agglomeration, and enhance the  
overall industrial strength and competitiveness of the region. In the  
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future, western South America could develop the hydropower in the  
western Amazon basin and the wind power and solar power in the  
northern coastal areas in an orderly manner. In the near future, it will  
mainly meet its own load demand and take advantage of hydropower in  
the long term. It will gradually become a renewable energy delivery  
base and become a power transfer station for realizing seasonal mutual  
support in South America and North America. The long-term  
transmission scheme for the clean energy base in Western South  
America is shown in Figure 4-3.  
Figure 4-3 Schematic Diagram of Long-run Transmission Scheme for Renewable Energy  
Bases in Western South America  
4.4 Central America  
Central American countries have obvious geographical advantages,  
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and are rich in wind energy, solar energy and geothermal energy  
resources. They can give full play to their geographical advantages  
connecting South America with North America, seize the great  
opportunity of adjustment in international industrial division of labor,  
vigorously promote the integration process of Central America, deepen  
industrial cooperation among Central American countries, and focus on  
the development of machinery, automobile parts, chemical,  
pharmaceutical and textile industries, thus forming a development  
trend of collaboration of heavy and light industries and simultaneous  
development of traditional and emerging industries. In the future,  
Central America could orderly develop the wind energy and solar  
energy resources in the region, strengthen and expand the power  
interconnection project in Central American countries, and promote the  
sharing of renewable energy in the region. Meanwhile, a new 400 kV  
double-circuit AC transmission channel connecting Panama with North  
America and Mexico, which runs through six Central American  
countries, will be built to expand the power exchange with North  
America. Moreover, as a channel interconnecting South America with  
North America, it will actively participate in seasonal power mutual  
support in South America and North America. Figure 4-4 shows the  
long-term transmission scheme of the clean energy base in Central  
America.  
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Figure 4-4 Schematic Diagram of Long-run Transmission Scheme for Renewable Energy  
Bases in Central America  
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5 Policy Environment and Investment and Financing  
Suggestions  
There is a huge market space for renewable energy exploitation in  
Central and South America. Based on the needs of economic  
development, energy transformation and ecological protection, many  
countries in Central and South America have formulated strategic plans  
for renewable energy, simultaneously liberalized the power market and  
relaxed access to renewable energy investment. By analyzing the policy  
environment of energy investment and financing and the investment  
and financing modes of typical projects in Central and South America,  
this report proposes some suggestions, including forming a diversified  
investment and financing system, building regional power market,  
improving the business environment, and strengthening inflation risk  
management, to further improve the investment and financing  
environment, innovate energy investment and financing mode, increase  
the development scale of renewable energy in Central and SouthAmerica  
and strengthen the strategic position of renewable energy.  
5.1 Overview of Countries in Central and South America  
The business environment of countries in Central and South  
America is quite different and the rankings of most countries have  
declined. The business environment needs to be optimized and  
improved. According to the Doing Business 2020 issued by the World  
Bank, among the countries rich in renewable energy resources in  
Central and South America, Chile, Colombia, Peru, El Salvador and  
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Guatemala ranked among 50th–100th in the global business  
environment, while Uruguay, Brazil, Paraguay, Argentina, Ecuador,  
Nicaragua, Bolivia and Venezuela ranked among 100th–190th. The  
rankings of most countries in the business environment declined year-  
on-year, while the rankings of Guatemala and Bolivia increased slightly.  
The global rankings of Chile, Colombia, Peru, El Salvador, Uruguay,  
Argentina and Ecuador declined slightly, from 56th, 65th, 68th, 85th,  
95th, 119th and 123rd to 59th, 67th, 76th, 91st, 101st, 126th and 129th  
respectively. The global rankings of Brazil, Paraguay and Nicaragua  
declined relatively sharply, from 109th, 113rd and 132nd to 124th, 125th  
and 142nd respectively. The global rankings of Guatemala and Bolivia  
increased, from 98th and 156th to 96th and 150th respectively.  
Venezuela ranked 188th in the world business environment and remains  
unchanged.  
Countries in Central and South America have diversified their  
renewable energy industries, and their medium and long term  
development strategies escort renewable energy investment. To  
improve the quality of energy development and deal with climate  
change, many countries in Central and South America have issued  
strategic plans for renewable energy. Among the countries rich in  
renewable energy resources in Central and South America, Brazil,  
Bolivia, Chile, Argentina, Paraguay, Colombia, Ecuador, Guatemala, El  
Salvador and Nicaragua have formulated medium and long term  
development plans for renewable energy to provide guidance for  
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domestic and foreign investors to participate in renewable energy  
exploitation, thus accelerating the development process of domestic  
renewable energy industries. Uruguay, Venezuela and Peru have not yet  
announced clear development plans for renewable energy.  
The degree of marketization in Central and South American  
countries varies greatly. Some countries have completed power  
market reforms, showing a diversified competitive landscape.  
Brazil, Chile, Argentina, Colombia, Peru and Guatemala have opened  
their generation, transmission, distribution and retail markets so that  
private enterprises can fully participate in the power market  
competition. Nicaragua and El Salvador have opened the competition  
on the sides of generation, distribution and retail, and the transmission  
market is monopolized by state-owned enterprises. Uruguay and  
Ecuador are in the primary stage of power market reform and only the  
generation side is open, allowing independent power producers to  
participate in the competition in the generation market and  
implementing a market mode of the integration of transmission,  
distribution and retail. Bolivia, Paraguay and Venezuela have low levels  
of power marketization and still follow the traditional vertically  
integrated mode, and relevant businesses are monopolized by state-  
owned power companies.  
Most countries in Central and South America actively revise  
their investment policies, relax the access conditions for foreign  
investment, and encourage foreign-funded enterprises to increase  
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investment in renewable energy. Brazil, Bolivia, Chile, Argentina,  
Paraguay, Uruguay, Colombia, Ecuador, Peru, Guatemala, E Salvador  
and Nicaragua have loose access conditions for foreign investment.  
Foreign investors can enjoy the same investment policies as their own  
enterprises and can engage in investment activities such as company  
establishment and enterprise merger and acquisition. There are no  
special restrictions in other countries except Brazil, which stipulates  
that foreign investors can withdraw funds after entering the country for  
six years. Venezuela has relatively strict access policies for foreign  
investment, for example, the proportion of investment in tangible assets  
such as equipment and others is limited and it is not allowed to  
withdraw funds within two years.  
Most countries in Central and South America have introduced  
policies such as tax relief and loan support to benefit renewable  
energy investment enterprises, but they are generally cautious  
about electricity subsidies. Most countries in Central and South  
America have formulated tax preference policies for renewable energy  
projects. Tax supporting policies focus on tax relief such as business  
tax, income tax and value-added tax, as well as import tariff reduction  
and accelerated depreciation of generation equipment. In terms of  
electricity subsidies, except for Venezuela and Colombia, most  
countries in Central and South America do not provide electricity  
subsidies. In terms of loan policies, to encourage foreign investment,  
most countries allow qualified foreign enterprises to raise funds and  
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apply for loans in local banks, and foreign-funded enterprises can enjoy  
the same financing policies as their own enterprises. Among these  
countries, Brazil provides low-interest credit for renewable energy  
projects, with interest rates ranging from 9.6% to 14.06%. Chile invests  
in unconventional energy generation and transmission projects for  
enterprises with annual sales of more than 40 million USD, and  
supports enterprises to apply for loans through designated banks.  
Uruguay allows foreign investors to raise funds locally, but financial  
institutions strictly examine the reputation of foreign-funded enterprises.  
Most countries in Central and South America relax the land  
lease and purchase controls, but generally tighten the review and  
management of foreign workers, and implement strict  
environmental impact assessment review system for investment  
projects. To attract foreign investment, most countries in Central and  
South America have relaxed their land management measures, allowing  
foreign-funded enterprises to obtain land ownership and use rights by  
purchasing and leasing within the local territories. Chile, Uruguay,  
Nicaragua, Colombia and Ecuador allow foreign-funded enterprises to  
buy and sell freely the land to obtain land ownership. Brazil, Argentina  
and Paraguay have restrictions on the area and location of land  
purchased by foreign-funded enterprises. Peru only grants foreign-  
funded enterprises land use rights for up to 30 years, and foreign-  
funded enterprises are only allowed to purchase land if they register  
locally. Bolivia and Venezuela only allow foreign-funded enterprises to  
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obtain land use rights through investment or cooperative operation.  
Except for Argentina and Paraguay, the labor management departments  
of Central and South America have generally tightened their policies  
on the management of foreign workers. All of them have implemented  
strict work permit review system to restrict foreign workers from  
entering their own labour markets, or set a maximum proportion limit  
on foreign workers. In terms of environmental protection policies, all  
countries in Central and South America have implemented a strict  
environmental impact assessment review system for renewable energy  
investment, and the investment enterprises will be punished  
accordingly in case of failing to carry out an environmental assessment  
as required.  
5.2 Investment and Financing Proposal  
1. Forming a Diversified Investment and Financing  
The economic base of Central and South American countries is  
generally weak, and the development of non-water renewable energy  
such as wind power and photovoltaic is relatively slow. First, fully  
liberalize foreign and private investment and transaction access in the  
clean energy industry to attract diversified market entities. Improve  
policies related to clean investment, increase support for tax incentives,  
financing facilities, and electricity price subsidies, and strengthen  
policy stability and continuity, to make full use of diversified  
international capital for large-scale development and utilization of clean  
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energy. Second, develop diversified and flexible investment modes  
such as PPP and BOT for foreign companies. Due to the large scale of  
investment in clean energy projects and multiple risks, the focus could  
be on the PPP mode development. It is recommended that government  
departments and foreign companies sign clean energy project contracts  
and jointly establish clean energy PPP project companies, forming a  
"benefit-sharing and risk-sharing" cooperative relationship, reducing  
the political risks and legal regulatory risks of cross-border investments.  
Give tax incentives, loan guarantees, priority development rights and  
other policy supports to foreign companies, so as to widely attract  
foreign investments on clean energy.  
Under the PPP investment mode, government departments and  
private enterprises sign renewable energy project contracts and jointly  
set up PPP project companies, which are responsible for financing,  
construction and operation. For government departments, cooperation  
with private enterprises through PPP mode can not only reduce  
government investment pressure and improve project financing ability,  
but also introduce advanced renewable energy development technology,  
management concept and operation experience of private enterprises to  
improve project development efficiency. For private enterprises,  
participating in PPP projects can reduce political risks and legal  
supervision risks, and meanwhile, they can obtain policy support such  
as tax preference, loan guarantees and preferential development rights.  
In a renewable energy PPP project, private enterprises need to  
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sign a power purchase agreement (PPA) with local power grid  
enterprises or power grid management departments, which is an  
important guarantee for the interests of investment enterprises and an  
important way to realize the benefit of investment projects. In view of  
the natural, political, legal and other irresistible risks in the investment  
of renewable energy projects, various risks should be fully considered  
in the design of power purchase agreement, and a risk sharing  
mechanism should be established. If necessary, the government should  
provide electricity payment guarantee to reduce the risk of investment  
benefit.  
2. Accelerating the Construction of Regional Power Market  
Some countries in Central and South America have little demand  
for power market, especially renewable energy market. It is proposed  
that the countries where the renewable energy base project is located  
should accelerate the construction of a unified power market in Central  
and South America, expand the scale of power market and realize the  
large-scale optimal allocation of renewable energy resources.  
First, integrate the electricity demand of the countries with the  
unified power market, further open the power market, expand the space  
of the power market, and fully mobilize the enthusiasm of market  
participants to participate in the consumption of renewable energy by  
means of quota system and green electricity certificate transaction, so  
as to increase the scale of renewable energy consumption.  
Second, give full play to the regulation capacity of market  
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mechanism, encourage countries to break down regional barriers, and  
build an inter-regional power market trading system with medium-and  
long-term transactions as the mainstay and spot transactions as the  
supplement through regional power facilities networking, so as to solve  
the problem of reverse distribution of energy resources and loads and  
ensure the balance between energy supply and demand in the region.  
Third, give full play to the advantages of scale benefit and cost of  
regional market, stabilize the price of electricity and ensure the safety  
of energy supply. Central and South America  
is rich in renewable  
energy resources, and there is great room for cost reduction. Through  
regional electricity market transactions, resources can be effectively  
allocated, stable electricity prices can be formed, contributing to the  
establishment of a sound renewable energy production and  
consumption system.  
3. Reducing Fossil Energy Subsidies  
The development of non-water renewable energy in Central and  
South American countries is still in the primary stage, and the  
proportion of non-water renewable energy is relatively low. Due to  
insufficient power supply, some countries need to import fossil fuels for  
power production, and give large subsidies to fossil energy for power  
generation, which to a certain extent inhibits the competitiveness of  
renewable energy and limits the development of renewable energy. In  
order to reduce the dependence on fossil energy, improve the  
diversification of energy supply and increase the competitiveness of  
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renewable energy, it is proposed to reduce the subsidies for fossil energy  
and give more financial subsidies to the development of renewable  
energy, and provide supportive fiscal policies such as tax reduction and  
loan preferences for the development of renewable energy, so as to  
improve the market competitiveness of renewable energy and attract  
foreign investment into domestic renewable energy market. By  
developing renewable energy, Central and South American countries  
can reduce or even get rid of their dependence on fossil energy,  
effectively improve the domestic ecological environment, increase  
green and high-quality jobs, and achieve clean and green sustainable  
development.  
4. Improving the Business  
Some countries in Central and South America have problems such  
as excessive restrictions on foreign investment access, complicated  
approval process, difficult financing and high cost. It is proposed to  
improve the business environment, simplify the approval process of  
investment and financing, and create a good environment to attract  
foreign investment.  
First, improve the policy environment of investment and financing.  
On the one hand, formulate open, transparent and stable investment and  
financing policies, improve the policy system  
of opening up,  
investment and financing, lower the access threshold for foreign capital,  
give foreign enterprises the same investment treatment as domestic  
enterprises, and reduce restrictions and constraints on the way and  
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amount of foreign investment entering the country. On the other hand,  
enhance the continuity of investment and financing preferential policies,  
ensure the long-term effectiveness of investment and financing  
preferential policies, and reduce the impact of policy adjustment on  
project progress and promotion efficiency. Second, optimize the  
financial and financing environment. Relax foreign exchange  
management, reduce restrictions on foreign exchange in/out, reduce the  
tax rate of profit remittance of foreign-funded enterprises, explore the  
bilateral monetary exchange and direct settlement, and stabilize the  
currency exchange rate. Increase financing channels for foreign  
enterprises, reduce financing costs, and provide preferential financing  
and loans for foreign enterprises investing in specific energy fields.  
Third, strengthen the construction of administrative approval system,  
integrate administrative resources, set up foreign investment and  
financing approval management institutions, simplify the approval of  
investment and financing administrative permits, shorten the approval  
period, provide one-stop services, improve the efficiency and level of  
administrative services, and attract foreign investment.  
5. Strengthening Inflation Risk Management  
Most countries in Central and South America are developing  
countries, which have risks such as unstable economic situation, frequent  
regime change, strict laws and regulations and frequent changes. In  
recent years, many countries have faced problems such as the growth of  
foreign debt, the instability of currency exchange rates, and the  
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increasing risk of inflation. Inflation will cause distortions in prices and  
various price factors such as costs, interest rates, and profits, which will  
distort market signals, cause confusion in business management, and  
bring great economic losses. Investment enterprises should understand  
the political, economic, and legal environment of the host country from  
all sides, and focus on the identification, evaluation and prevention of  
various risks such as inflation. It is proposed that investment enterprises  
invest in clean energy-related fixed assets or value-preserving assets  
with a low probability of depreciation to avoid the risk of currency  
depreciation, achieve capital preservation, and strengthen the ability to  
respond to inflation. Stricter credit conditions should be adopted to  
reduce corporate debt, and financial policies should be adjusted to  
prevent and reduce the loss of corporate capital. Utilize financial  
instruments such as long-term purchase agreements, futures contracts,  
or forward contracts, to determine the cost of raw materials required by  
the project in an acceptable price range in advance, thus reducing the  
risk of rising raw material costs caused by inflation. At the same time,  
purchase relevant investment insurance, conduct project guarantees,  
and actively use professional risk management institutions to  
effectively prevent and manage risks.  
6. Reducing the Cost of Funding  
The financing cost of the financial system in Central and South  
America is generally on the high side. It is proposed that investment  
enterprises make more use of international financial markets with lower  
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Research on Central and South American Renewable Energy Development and Investment  
interest rates such as Europe and America to obtain low-cost financing.  
The benchmark interest rates of Brazil, Peru, Colombia and other Central  
and South American countries are above 12%, far higher than those of  
European and American countries. At present, the benchmark interest  
rates in the United States, the United Kingdom, Switzerland and other  
European and American countries are 0%-0.25%, 0.25% and -1.25%- –  
0.25% respectively.  
It is proposed that investment enterprises use financial instruments  
such as hybrid bonds, green bonds, supply chain finance, debt  
replacement (short-term debt is replaced with long- term debt) and  
financial leasing to reduce financing costs and improve capital  
utilization efficiency. At the same time, use derivative financial  
instruments such as forward contracts, foreign exchange futures and  
foreign exchange options to prevent and avoid financing risks. Use  
financial swap tools, obtain loans with interest rates lower than the  
market fixed or floating interest rates through interest rate swap, so as  
to reduce the actual financing cost.  
Renewable energy resources in Central and South America have  
large development potential and there is much room for development  
cost reduction. Under the demands of promoting economic growth,  
ensuring energy security and improving ecological environment, the  
development of renewable energy such as wind power, photovoltaic and  
hydropower in Central and South America is entering a new stage of  
development, and there is a large market space for renewable energy  
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Research on Central and South American Renewable Energy Development and Investment  
investment. In order to further accelerate the development of renewable  
energy, Central and South American countries need to further improve  
the business environment and innovate investment and financing modes.  
This Chapter sorts out the policy environment of Central and South  
America and the main policies of major countries, and puts forward  
investment and financing proposals for developing renewable energy in  
Central and South America, including making full use of the  
international capital market to form a diversified investment and  
financing system with a wide range of funding sources and flexible  
investment modes, accelerating the construction of a regional power  
market to expand the space for clean energy consumption, improving  
the business environment and strengthening inflation risk management,  
so as to improve the ecological environment of Central and South  
America, accelerate the promotion of renewable energy alternatives and  
accelerate the rise of strategic position of renewable energy in Central  
and South America.  
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