Latin America and the Caribbean have already reached 96% electricity coverage. The region could be the next to achieve universal access but there are still challenges that need to be addressed. The IDB is contributing to this endeavor.
In September 2011, UN Secretary-General Ban Ki-moon launched the Sustainable Energy for All initiative (SE4All) to mobilize action from all sectors of society in support of providing universal access to modern energy services, doubling the global rate of improvement in energy efficiency, and doubling the share of renewable energy in the energy mix, all by 2030.
In October 2015, Ministry of Energy representatives from 18 countries met in Tarija, Bolivia to discuss and plan how to achieve Sustainable Development Goal number seven (SDG7) in order to “Ensure access to affordable, reliable, sustainable and modern energy for all.”
During the discussions, four organizations – the IDB, UNDP, OLADE and ECLAC – decided to join efforts to facilitate the implementation of SE4All in Latin America and the Caribbean and in doing so, to move towards achieving its goals. The SE4All 2030 objectives are now part of SDG7, approved by 193 countries at the United Nations Sustainable Development Summit in 2015.
After this global dialogue, we have observed a new impetus for investment in energy efficiency, as well as in renewables and energy access, which makes it a favorable time to look at how we are performing regarding the SE4All goals and what still needs to be accomplished in the region.
Latin America and the Caribbean perform quite well in terms of doubling the use of renewables, which already account for 30% of the region’s energy mix. One of the premises of SE4All is that annual global investment in renewables needs to double; the good news is that the use of renewables is about three times higher in the region than in the rest of the world.
The other good news is that Latin America and the Caribbean is currently the developing region closest to reaching the SE4All objective of achieving universal access to electricity by 2030.
Although considerable progress has been made, there are still challenges that the region needs to address.
The first one involves improving energy efficiency. Energy intensity, which is a key indicator for measuring this objective, is not decreasing in the region as fast as it is in the rest of the world. In fact, the rate of improvement in energy intensity is three times slower. This represents an opportunity for optimization as significant intervention will be necessary to achieve the goals of SE4All in energy efficiency. Accelerating implementation will require investment in both energy efficiency and institutional and regulatory measures, including additional mandatory standards for the manufacturing of energy-consuming equipment.
There are several good and replicable examples of energy efficiency in Latin America and the Caribbean that can be used as models for future programs. Just to mention some: São Paulo and Managua are currently implementing programs to replace street lights with high-efficiency LED lighting systems. Most countries in the region have banned or are banning incandescent bulbs, including large markets like Brazil, Mexico, and Argentina.
Several countries are in the process of approving and/or expanding energy efficiency laws and regulations. At the IDB we are doubling our efforts to accelerate energy efficiency interventions by working closely with partners to overcome financial, institutional, and informational barriers based on existing and well-proven practices and delivery mechanisms. For example, we are helping design energy efficiency programs in Central America to support SICA regional integration activities, as well as coordinating several other studies, events, and analytical work.
The second challenge is providing access to electricity services to 25 million people in Latin America and the Caribbean. While coverage in the region is above the global average, the region still needs to close the remaining gap. About 90% of the 25 million people who lack access to electricity are concentrated in 11 countries of the 26 in the region. We are currently working with México, Ecuador, Honduras and Nicaragua to plan for universal access.
Finally, the third challenge is increasing the renewables’ penetration. While the use of renewables in the region is about three times higher than in the rest of the world, increasing its share remains a challenge requiring innovative solutions through coordinated efforts from both the public and private sectors. In partnership with IRENA, the International Renewable Energy Agency that supports countries as they transition to a sustainable energy future, we are currently piloting the Sustainable Energy Marketplace which will provide technical assistance to selected projects.
Lastly, I would like to share some hard data regarding investments towards the SE4All objectives. At Rio+20 in June 2012, we committed US$5 billion for SE4All projects over five years. In the first 36 months since Rio+20, we provided over US$3 billion, and in 2016 we will deliver US$460 million in financing for energy projects in Barbados, Bolivia, Colombia, Ecuador, Honduras, Jamaica, and Nicaragua.