Energy and diplomacy: The role of international relations in the sector
Energy diplomacy has become a key pillar for the economic development and national security of many countries, particularly in Latin America. In recent years, the region has experienced sustained growth in the adoption of renewable energies, positioning itself as one of the most dynamic areas in the world within this sector. Between 2022 and 2023, Latin America ranked as the second region globally with the largest increase in renewable energy capacity added to its electricity grids—surpassed only by China—according to the International Energy Agency (IEA).
This progress reflects not only international commitments but also the pressing need to diversify the energy matrix and harness the region’s abundant natural potential.
Expansion of the Energy Industry in Latin America
Latin America has proven to be a region with a highly “green” electricity mix. Last year, 62% of electricity demand was met through renewable sources, with hydropower leading the way, accounting for 45% of total supply. However, the energy transition extends beyond electricity. In sectors such as transportation and industry, dependence on fossil fuels remains significant—oil accounted for 38% and natural gas for 25% of total energy consumption in 2021, according to ECLAC.
Despite these challenges, the region is moving rapidly toward greater integration of renewable energies. Currently, there are over 8,000 renewable energy projects in the early stages of development, including hydrogen initiatives, with a total projected investment of USD 233 billion. Additionally, 703 projects are under construction, representing USD 20.9 billion in investment. This scenario presents a unique opportunity for companies seeking to expand within the oil & gas and renewable energy industries in Latin America.
Opportunities for International Companies
The energy company expansion in Latin America opens a wide range of opportunities for international companies. The region holds vast untapped potential in hydropower, solar, and wind energy, making it an attractive destination for foreign investment. Moreover, the decline in renewable energy costs has enabled several Latin American countries to accelerate their development in solar and wind power, creating a favorable environment for new market entrants.
Chile and Brazil are leading the region’s renewable energy efforts, ranking second and fourth worldwide in the 2024 Renewable Energy Tracker published by the Climate Action Network. Other countries—such as Argentina, Mexico, and Uruguay—are also making progress, albeit at a slower pace. This dynamic landscape calls for robust energy diplomacy strategies to help international companies navigate the complex regulatory and political frameworks across the region.
Energy Diplomacy and a Just Transition
Energy diplomacy goes beyond negotiating trade and investment agreements—it also involves promoting a just and sustainable energy transition. The “energy trilemma”—security, equity, and sustainability—is a central concept guiding Latin American nations in their transition strategies. While the region has advanced considerably in renewable energy expansion, significant challenges remain regarding equity and sustainability.
Companies seeking to expand in Latin America must consider not only the technical and financial aspects of their projects but also the social and environmental dimensions. Collaboration with local governments, communities, and non-governmental organizations is essential to ensure that the benefits of the energy transition are distributed equitably.
Tools for Success in International Expansion
For companies aiming to capitalize on opportunities in Latin America, it is crucial to develop effective lead generation and communication strategies tailored to local markets. Platforms such as Unlock Latam provide specialized solutions for businesses looking to expand in the region, offering up-to-date databases and consulting services in energy diplomacy. Furthermore, lead generation experts can assist in identifying business opportunities and establishing strategic partnerships within the energy sector.
Other key tools include optimizing response rates in external communications and leveraging cold calling techniques adapted to the energy industry. These strategies enhance corporate visibility and improve the effectiveness of international expansion campaigns. The ability to adapt to local contexts and communicate effectively with stakeholders is vital to achieving success in emerging markets—ultimately increasing response rates and growth potential.
Latin America: A Region with High Potential
Energy diplomacy and the growth of the energy sector in Latin America represent a unique opportunity for international companies. The region’s untapped renewable energy potential and favorable investment environment create ideal conditions for long-term development. However, success in this market requires strategic lead generation, clear communication, and collaborative engagement with local stakeholders.
Companies expanding into Latin America must address not only technical and financial considerations but also the social and environmental implications of their projects—promoting a just and sustainable energy transition.
“The expansion of the energy sector in Latin America represents a crucial opportunity to drive sustainable development and regional integration. Embracing green energy not only reduces dependence on fossil fuels but also fosters technological innovation and environmental stewardship, ensuring a cleaner and more competitive future for our nations,” Diego Espindola, Lead Generation Expert
