Feb. 23 (UPI) -- As Western institutional investors and Chinese state-backed lenders compete for influence over Latin America's energy infrastructure, one factor is quietly determining who builds the region's clean-energy future: the cost of capital.
Countries that compress financing costs through policy stability and structured green credit mechanisms are attracting investment that higher-risk environments cannot. In this contest, Brazil and Mexico are pulling ahead.
In earlier installments of this series, we examined how political instability in Venezuela and Ecuador drives the weighted average cost of capital (WACC) to prohibitive levels. Elevated country-risk premiums and regulatory volatility raise borrowing costs and deter equity participation, even in resource-rich economies. Brazil and Mexico present a different dynamic -- and one increasingly consequential for the region's place in a reconfiguring global capital order.
The green transition is not merely environmental policy. It is a capital allocation strategy.
How policy reduces the cost of money
