Investment Opportunities in Sustainable Development in Latin America – El Sol de México

By Antonio Reyes*

Despite calls for hope in the UN Climate Change Conference This year in the United Arab Emirates, the world is in an advanced state of environmental degradation, accompanied by growing social and political polarization. Furthermore, the lack of trust of citizens in their governments exacerbates the difficulties in achieving consensus and building a more sustainable and viable world.

However, designing a better world often also represents a business opportunity and vision for governments. Thus, a growth approach driven by investment and clear development policies is most effective when guided by clear direction and purpose. The United Nations Sustainable Development Goals (SDGs) They offer a way forward.

The SDGs provide a compass to address the biggest challenges of our times, in areas such as poverty, hunger, climate change and gender equality. Which are prevalent problems in most of Latin America and that require not only technological solutions, but also social innovation.

Recently I dedicated myself to exploring the SDG Investors Map. In its online version, this is a UN market intelligence tool that charts different routes to rethink industrial and investment priorities in Latin America and the rest of the world. This tool helps the public and private sectors identify investment opportunities aligned with national policies and sustainable national development needs with direct or indirect impact on the SDGs.

The map currently highlights 140 investment opportunities in countries such as Argentina, Belize, Brazil, Colombia, Costa Rica, Dominican Republic, Panama, Paraguay, Peru and Uruguay. The absence of Mexico and Chile on the map raises suspicions about the comprehensiveness of the tool, especially given the important challenges that both countries face in the SDG landscape. However, it could also suggest a lack of coordination and information between Chilean and Mexican development agencies and the Platform, lacking information on investment projects with sustainable impacts.

Approximately 24% of the investment opportunities in the SDG Investor Map in Latin America and the Caribbean focus on the food and beverage sector (Figure 1). This includes the expansion of agricultural and irrigation capacity in some of these countries. Interesting investment innovation opportunities can be found, including the use of artificial intelligence to understand efficiency methods in growing seed crops in Paraguay, or the use of technology blockchain to improve food traceability in Colombia’s supply chains, and thus reduce waste.

On the other hand, 18% of investments focus on renewable energy projects. Despite the region’s historical dependence on fossil fuels, this percentage of investment opportunities is promising. Brazil, Belize and Panama lead these investment opportunities in solar and wind energy production, including microgrids for rural communities. These developments have a market value of one billion dollars, with an expected return on investment between 5 and 10 years.

Another notable area in the region is infrastructure for development, which constitutes 17% of investment opportunities. Access to reliable and modern services, including electricity, water and sanitation, remains a concern in most rural areas of the region. Infrastructure development addresses challenges in electrical and water services (mainly in Brazil), engineering and construction (Dominican Republic and Panama), real estate (Paraguay), and waste management (Uruguay and Belize).

The map also indicates lower representation for other development sectors, such as education (7%) and transportation (4%). These figures do not suggest the absence of challenges in education and mobility in Latin America, but rather reflect the limited number of projects classified as SDG impact prospects.

Figure 1. Investment opportunities for Sustainable Development in Latin America and the Caribbean

*Prepared by the author with data from the SDG Investment Map 2023.

In the region, making these investments will not be an easy task. Governments will be required to take a proactive role in shaping markets alongside the private sector, and in identifying and reporting joint opportunities in sustainable impact investing. The above also entails a move away from narratives that sharply divide the State and business. This is especially relevant under the new libertarian and minimal government experiments that will be seen in the region.

But looking to the future, the region has much to gain by catalyzing investment and innovation in various social and industrial sectors. A new perspective on growth strategy is imperative, positioning the public and private sectors as partners in solving complex challenges linked to the SDGs. This relationship should be considered symbiotic and not parasitic, as ECLAC already indicates in its report on Transformational change in Latin America and the Caribbean.

*Antonio Reyes has a doctorate in Political Science and International Development from University College London (UCL). He currently works as a public policy researcher and consultant, covering a variety of public and industrial sectors. Antonio has experience in developing research projects in international organizations, including the Regulatory Policy Division of the OECD and the Innovation in Citizen Services Division of the IDB. His contributions to these organizations are reflected in official publications with impact in more than 35 countries. He is an associate at Chatham House, the UCL Global Governance Institute, and the Yale Institute for Network Science. He is director and founder of Exedra Intelligence, a London-based innovation startup for public-private partnerships. He is an associate member of the Mexican Council of International Affairs (COMEXI).

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