US moves to 'unleash' investor value in US$1tn LatAm energy expansion

The US-backed América Crece program could help jumpstart energy and infrastructure investments of US$1tn in Latin America and the Caribbean over the next five years, a senior treasury department official told BNamericas. 

The initiative, launched in 2018, addresses structural, regulatory, legal and market barriers for project developers and financiers, Mitchell Silk, the US Treasury Department's acting Assistant Secretary for International Markets and Development, said in an interview.

"The infrastructure needs in Latin America and the Caribbean are enormous," said Silk, who will be a keynote speaker at the Americas Gas and Power Summit (AGPS19) in Panama City on November 20-22.

"We seek to create greater channels for private capital participation to reduce government budgetary and taxpayer burden, while bringing greater value to ratepayers. Our model unleashes value, lets the private capital markets work at their best, and reduces government and taxpayer burden."

América Crece received a boost this year with the creation of the US International Development Finance Corporation (DFC), which provides loans, loan guarantees and political risk insurance for development projects.

A large chunk of the DFC's US$60bn investment cap is expected to be disbursed in Latin America and the Caribbean. 

"The DFC represents a renewed commitment by the United States to support countries’ economic development through the mobilization of private sector investment," Silk said. "The US$60bn envelope is more than double the existing envelope for the DFC’s predecessor, the Overseas Private Investment Corporation (OPIC), and... the DFC has a broad range of financial instruments to support investment projects." 

According to US treasury data, Latin America is OPIC's top region, accounting for about a quarter of its US$23bn financing portfolio.

Silk added that Latin American and Caribbean project developers will be able to apply directly to the DFC for financing or contact their nearest US embassy or USAID mission.

The full interview with Mitchell Silk can be seen here.