Building The Future: Infrastructure Development in Latin America

ARTICLE 

 

Latin America is undergoing one of the most ambitious phases of infrastructure transformation in its history. From ports and highways to renewable energy plants and data centers, large-scale projects are reshaping economies, increasing regional integration, and attracting private investment across the region.

 

“These initiatives are not just about improving logistics,” explains Javier Jácome, Underwriter Credit & Surety at Active Re. “They are designed to drive GDP growth, create jobs, and enhance competitiveness on a global scale.” Many of these projects extend well into the next decade, signaling a long-term commitment to modernization.

 

 

Across Latin America, megaprojects are reshaping national and regional landscapes. The transportation sector remains the most active, fueled by population growth and urban expansion. New highways, rail corridors, and port upgrades are being developed to meet rising trade and mobility demands. Energy is another key focus, with countries investing in renewable sources and modernizing grids to ensure energy security. Meanwhile, digital infrastructure, especially data centers and AI connectivity, is emerging as a critical pillar of future growth. In Central America, plans for cross-country railway projects in Panamá and Costa Rica could eventually form a regional logistics network, a symbol of the broader push for integration and connectivity.

 

Financing this transformation, however, remains a challenge. “Fiscal deficits, regulatory uncertainty, and currency volatility make access to long-term capital difficult,” notes Jácome. Local banking systems often lack the depth to support large-scale projects, and fluctuating exchange rates have prompted some governments to explore partial dollarization. Despite these hurdles, innovative financing tools are helping make these projects more feasible and attractive to investors. Public-Private Partnerships (PPPs) are increasingly common, allowing governments to advance major projects without heavy upfront spending. The surety sector also plays a vital role, strengthening confidence and mitigating risk for all participants. Additionally, green and blue bonds are unlocking capital from ESG-focused investors, while advanced financial structuring, such as asset-backed securities and investment banking solutions, provides access to global capital markets. Together, these mechanisms help balance risk, returns, and sustainability.

 

Infrastructure projects in Latin America still face significant economic and political risks. Inflation, currency fluctuations, political gridlock, and shifts in foreign policy can affect project timelines, costs, and financing availability. Yet, Jácome highlights progress: “Strengthened PPP frameworks, public guarantees, and collaboration with development banks are creating a more stable environment and boosting investor confidence.”

 

The opportunities, however, are immense. Demand for infrastructure continues to outpace investment, particularly in transport, energy, digitalization, and water management. To unlock this potential, governments and private actors must continue to improve regulations, enhance transparency in procurement, and develop local capital markets. Combined with ESG-aligned financing and strategic partnerships, this approach can transform economies, enhance connectivity, and improve quality of life across the region.

 

“Latin America is moving toward sustainable, technology driven, and inclusive development,” says Jácome. “With the right mix of financial innovation, risk management, and collaboration, the region is well-positioned to build the foundations for long-term prosperity.”

 

This article was initially released in ICISA Insider with the title, "The ICISA Insider - November 2025 | ICISA"