As Latin American governments turn to private capital to finance the energy sector, opportunities for foreign investors are matched only by those in Asia. And when Brazil hits the market, all that went before will pale in comparison. Michael Marray reports
The Latin American energy sector is going through a period of unprecedented change. In the oil industry, the long-standing taboo against foreign involvement has been broken - even Venezuela recently signed exploration joint ventures with the big western oil companies. And in power generation and distribution, a wave of privatizations is sweeping the region, not only bringing in players from the developed world but, at the same time, resulting in growing links between the regional power utilities.
The primary force behind all this is the recognition by Latin American governments of a pressing need to utilize private sector capital in infrastructure development. This theme was spelt out during a visit to Chile in May by German foreign minister Klaus Kinkel, accompanied by a delegation of German businessmen. During a meeting with Kinkel, Chilean president Eduardo Frei reiterated his policy of involving the private sector in the development of infrastructure and stressed the importance of freeing state resources for investment in social projects.
