The Three “Clean Energy” Kings of Latin America

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Bloomberg New Energy Finance and the Multilateral Investment Fund, as part of the partnership they formed called Climatescope, has named Brazil, Nicaragua, and Panama as the highest ranking countries for clean energy investment in Latin America and the Caribbean.

Countries were graded in the following four categories: clean energy investments and low carbon financing, enabling framework, greenhouse gas management activities, and low carbon business and clean energy value chains.

Brazil came out on top of the 26-country ranking, by attracting 80% of of the region’s total US$90 billion invested in clean energy during the 2006 to 2011 period. It’s high ranking is mostly due to the amount of low-carbon businesses and its complete value chains in the areas of biofuels, biomass and waste, and small hydro.

Wind and geothermal projects in Nicaragua helped it fall into the number two slot. Nicaragua currently has 10 microfinance institutions focusing on climate and clean energy finance. Panama came in right behind the other two countries, mostly due to its efforts to manage the emissions of green house gases and an enabling regulatory framework. These have led to strong growth rates in clean energy generation.

Latin America and the Caribbean have so much raw vegetation and resources available, that investors are just now realizing. The potential for green investments in this area is astronomical. Yet, this region only accounted for 10% of the money spent on clean energy investments by U.S. investors in 2011.

With so many companies out there trying to go green, it’s reports and rankings like this that open investors’ eyes to the opportunities missed and the ones still available offshore. Collaborating with countries of a like mindset can yield great business advantages. In Panama, for example, the City of Knowledge, is an area focused entirely on contributing to the full development of Panama and Latin America. For that reason, huge tax and immigration advantages are given to investors opening businesses within the City of Knowedge.

Brazil, which snagged the number one spot on the ranking, has an agri-investment opportunity that shouldn’t be missed. One company we’ve invested in personally uses hybrid coconut trees to produce meat, water, oil, feed for cattle, medication, and even bio-fuel from the husks; it’s a green investment we’re excited about. This is a guilt-free investment that provides virtually no market risk.

The final report on Clean Energy in Latin America and the Caribbean will be presented during the Rio+20 United Nations Conference on Sustainable Development in June, 2012.

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