6 national trajectories

In 2024, natural gas and oil together accounted for more than 80% of the total primary energy supply, consolidating a structure highly dependent on fossil fuels. Natural gas alone contributed approximately 52.5% of the national energy supply, one of the highest shares among the six countries analyzed, second only to Peru. Oil accounted for 31.8%, while coal had a marginal share of just 0.9%, limiting the possibility of achieving rapid emission reductions by substituting coal with gas, as was the case in other economies. Unlike most countries in the region, Argentina also had a significant contribution from nuclear energy (3.5%), reflecting a long tradition of developing scientific, technological, and industrial capabilities associated with the sector.¹⁷

As a result, renewable sources maintained a reduced share. Hydroelectricity accounted for about 3.9% of the primary matrix, followed by biomass (4.9%), wind (1.8%) and solar, with only 0.4%. As can be seen in the statistics, although the growth of renewable energies was significant during the last decade, its impact on the overall structure of the energy system is still limited..

The sectoral structure of energy consumption helps explain the persistence of this dependence on hydrocarbons. Transport was the main consumer sector, accounting for approximately 30.7% of total energy demand and relying almost exclusively on petroleum derivatives. The residential sector accounted for 27.2%, followed by industry with 22.9%. The remainder corresponded to commercial and public sector (8.1%) and agriculture (6.6%), while electrification of transport and industrial processes was still marginal.

Natural gas was the backbone of the Argentine energy system, not only in electricity generation, but also in heating, industry and residential consumption. Thus, the expansion of the sector would no longer displace more polluting fuels, such as diesel or fuel oil, whose share had declined considerably, but could end up displacing renewable alternatives such as wind and solar energy.

Argentina’s energy transition cannot be understood only as a problem of renewable energy supply. Without policies that actively change energy demand—especially in transport and industry—even accelerated growth in renewable energy will have limited effects on the development of a cleaner energy matrix.

Argentina’s electricity matrix is considerably more diversified than the overall energy matrix, although it relies heavily on natural gas. In 2024, fossil fuels accounted for just over half of total electricity generation: Gas contributed 42.1%, oil 7.7% and coal 1.5%. Non-fossil sources generated approximately 45.6% of the electricity, distributed among hydroelectricity (23.2%), wind (11.2%), nuclear (7.1%), solar (3.2%) and biomass energy (0.9%). Electricity imports accounted for 3.2% of total generation.

This combination gives Argentina a comparatively clean electricity system by international standards. However, this low carbon intensity depends heavily on natural gas, whose presence in the energy matrix is among the highest in South America, second only to Peru. Instead of playing a complementary role—as in Brazil, Colombia and Chile—in Argentina, gas is the cornerstone of electricity generation and residential and industrial consumption.

Electricity consumption was led by households, which accounted for approximately 37.9% of total demand, followed by industry (32.2%) and the commercial and public sector (25.5%). Agriculture accounted for just over 1%, while electricity transport maintained a marginal share of only 0.26%. Unlike other countries analyzed, where electricity demand is usually concentrated in one or two dominant sectors, Argentina presented a balanced distribution between the residential, industrial and commercial segments. This configuration suggests a widely distributed electricity consumption base across the economy, which could facilitate the gradual incorporation of new consumption associated with electrification of transport, air conditioning and certain industrial processes without relying on the transformation of a single consumer sector.

Taken together, hydroelectricity, wind and nuclear power give Argentina a low-carbon power generation base. Within this set, wind energy has been the fastest-growing source over the past decade, positioning the country among the regional leaders in installed capacity. Solar energy, on the other hand, maintains a minimal share despite the extraordinary potential of northwest Argentina, one of the areas with the highest solar radiation in the world.

The country’s macroeconomic constraints notwithstanding, inadequate transmission infrastructure is currently the main barrier to expanding and integrating new renewable projects.

To a large extent, Beijing and Chinese companies have filled the spaces opened up by the relative retreat of Western and multilateral financiers, aligning their industrial and strategic interests with Argentina’s liquidity and investment needs. China’s presence ranges from large hydroelectric and solar projects to lithium mining, transmission infrastructure and technologies associated with the electricity system, adopting different forms depending on the sector and the province.

Beginning in the 2010s, energy cooperation between Argentina and China developed through large hydroelectric infrastructure projects. Among them are the Néstor Kirchner and Jorge Cepernic dams, located on the Santa Cruz River, considered one of the most emblematic projects of the bilateral relationship. The works were awarded to a consortium led by the Chinese state-owned company Gezhouba Group and financed mainly by loans from Chinese policy banks. Originally conceived to provide approximately 1,740 MW of installed capacity to the national electrical system, the project was subsequently redesigned during the administration of Mauricio Macri to reduce its environmental impact, reducing its expected capacity to around 1,310 MW.¹⁸

Efforts to expand bilateral energy cooperation also reached the nuclear sector, albeit without materializing. In 2014, Argentina and China agreed to advance the construction of Atucha III, a new nuclear power plant based on Hualong One technology of the China National Nuclear Corporation (CNNC). The project advanced to the signing of a commercial contract in 2022, but difficulties in securing a definitive financing scheme, compounded by growing geopolitical pressure from the United States over the use of Chinese nuclear technology, led to successive renegotiations before the initiative was finally abandoned.¹⁹

These projects embody the state-to-state cooperation model characteristic of the past decade, based on financing from Chinese state banks and the participation of public companies from both countries. Implementation revealed, however, several vulnerabilities in the scheme: Execution delays, recurrent contractual revisions and a marked dependence on Chinese disbursements, whose interruption went so far as to compromise the continuity of the works.²⁰

Beyond hydroelectric power plants, China’s presence has expanded into renewable energy and mining. In the renewables sector, the Cauchari solar complex in Jujuy²¹—financed by China Exim Bank and built by Shanghai Electric Power Construction, a subsidiary of the state-owned PowerChina—became one of the most prominent cases in the RenovAr program. With a current capacity of around 300 MW and expansion plans toward 500 MW, Cauchari ranks among the largest solar projects in Latin America. The project also included local training and assembly mechanisms.

These experiences suggest a fundamentally transactional relationship, in which Chinese companies occupy spaces that the State and the domestic private sector cannot cover due to financial or technological constraints, or a combination of both. Provincial governments, for their part, use Chinese financing as a lever to advance strategic projects. As Juan Carlos Villalonga pointed out, “When China negotiates with a provincial governor, the difference is always in the financing they can offer.”²²

A diplomatic component adds to this provincial logic. Several interviewees indicated that the provinces sometimes act as a point of entry, while the Chinese Embassy plays a role of validation and coordination.²³ In terms of mineral resources, lithium constitutes the most sensitive and strategic dimension of China’s presence in Argentina. Large reserves in the north of the country have attracted investments from companies such as Ganfeng Lithium, Zijin Mining and Tibet Summit Resources, which combine private capital with Chinese state backing. These companies are involved in some of the country’s major lithium projects, including Cauchari-Olaroz in Jujuy and Tres Quebradas in Catamarca.²⁴

Beyond the influx of foreign investment and the expansion of extractive capacity, the development of lithium has given rise to a broader debate about the sector’s development model. Recurring themes include local industrialization, battery production, technology transfer, rent capture by provinces and mechanisms of coordination among producing jurisdictions.²⁵

In recent years, China’s presence has expanded from equipment imports to a handful of manufacturing and assembly projects, concentrated in a few provinces. In San Juan, the first national solar panel assembly plant is preparing to start production using machinery and inputs mainly from China, with the ambition of gradually moving toward higher value-added stages.²⁶ The province currently obtains more than 60% of its installed capacity from solar sources thanks to the high levels of radiation in northwestern Argentina and seeks to position this industry as a complement to its mining economy. Technological dependence remains evident, but the possibility of localizing part of the value chain also emerges.

The differences in regulatory and institutional capacities between provinces, reinforced by the decentralized nature of the Argentine federal system, generate significant variations in the conditions of supervision and application of standards between jurisdictions. These regulatory inequalities seem to influence the levels of transparency and oversight observed in some projects developed by Chinese companies. Among those interviewed, several noted that initiatives funded by multilateral or European actors, standards related to community consultation, environmental assessment and monitoring mechanisms tend to remain consistent across provinces.²⁷ In contrast, in several projects linked to Chinese companies, the results appear to be more closely correlated with the strength, or weakness, of local regulatory frameworks.

The differences between Jujuy and Salta clearly illustrate this pattern. While Jujuy has developed greater local oversight and coordination capabilities around lithium and solar projects, in Salta certain operations have functioned as enclaves with little integration into local economies. Similar tensions have also emerged in Catamarca, where the Tres Quebradas lithium project, operated by Chinese company Zijin, has faced sanctions for various regulatory, environmental and social violations.²⁸

While Milei’s government has prioritized economic growth and the expansion of extractive sectors, it has shown limited commitment to renewable energies.²⁹ Nonetheless, to the extent that renewables continue to attract investment, create jobs, and support exports, their development—including projects financed by Chinese firms—is likely to persist, though not at the speed observed in the past decade.

With regard to China, the country’s model of engagement is going through a reconfiguration phase. Over the past decade, China’s presence in strategic sectors—energy, mining and infrastructure—was tied to a combination of state financing, intergovernmental agreements and Argentine macroeconomic needs. The currency swap agreement between the People’s Bank of China and the Central Bank of Argentina served as a pillar of cooperation. Established in 2009 and renewed on several occasions, the mechanism reached a line equivalent to approximately US$18,5 billion and included the activation of a US$5 billion tranche renewed during the administration of Javier Milei. The continuity of this mechanism reflects China’s relevance as a source of external liquidity and financial support for Argentina’s macroeconomic stability.³⁰

Under Milei, that framework faces new political limits. His government has explicitly pursued closer ties with Washington, reinforced by the US$20 billion financial agreement with the United States and its ideological affinity with U.S. conservative sectors. This orientation aims to reinsert Argentina within the economic and geopolitical orbit of the United States.³¹

However, the political shift has not entailed an interruption of Chinese energy, mining and infrastructure projects. Many continue to move forward with long-term contracts, well-established business partnerships and provincial actors interested in sustaining investments capable of generating jobs, exports and foreign exchange. This logic could also be extended to new projects linked to natural gas, including initiatives to develop liquefaction capacity and LNG exports from Vaca Muerta, in which Asia—and potentially China—are among the main destination markets.³² The relationship with China, therefore, does not disappear with the change in political alignment; it is transformed.

The key point is that the Sino-Argentine energy relationship operates less and less as a strategic agenda directed by governments and increasingly as a transactional dynamic, conditioned by economic incentives, regulatory frameworks and market opportunities. This transition marks a significant departure from the model that prevailed during the 2010s, especially during Cristina Fernández de Kirchner’s second term, when the relationship with China was more closely tied to bilateral agreements, concessional financing and negotiated infrastructure between states.³³

The creation of the Large Investments Incentive Regime (Régimen del Incentivo para Grandes Inversiones, RIGI) in 2024 deepens this transformation. The regime offers tax, customs and currency benefits, as well as guarantees of regulatory stability for large-scale projects in sectors such as mining, energy, hydrocarbons and infrastructure, areas where Chinese companies already have a consolidated presence.³⁴ In fact, projects linked to Chinese capital, such as the Cauchari-Olaroz expansion operated by EXAR, have already obtained the approval of the tax regime.³⁵ From this perspective, the RIGI does not exclude Chinese capital; on the contrary, it can provide it with an even more favorable framework provided that its investments conform to the economic logic of the new government.

This dynamic helps explain the apparent paradox of Milei’s foreign policy: A government that is geopolitically aligned with the United States can,³⁶ at the same time, preserve or even expand spaces for Chinese capital in strategic sectors. The key lies in the convergence between the interests of Chinese companies, the fiscal and external needs of Argentina, and an economic policy aimed at attracting private investment without necessarily discriminating on the basis of national origin.

On energy matters, this approach clearly favors an agenda focused on the exploitation of hydrocarbons and on the infrastructure needed to expand natural resource exports. While the government has not formally abandoned the renewable energy incorporation targets, it has promoted deregulation measures that reduce state support instruments and has allowed part of the incentives that underpinned the sector’s growth over the last decade to expire.³⁷

For example, according to the draft Budget Law 2026, subsidies to the supply of hydrocarbons reach ARS 651,600 million (≈USD 436 million), while the budget items linked to renewable energies and the Fund for the Development of Renewable Energies total ARS 37,075 million (≈USD 25 million). In other words, resources allocated to renewables equate to just 5.7% of those allocated to the hydrocarbon sector, a budget disparity consistent with the government’s priority on hydrocarbon development.³⁸

What distinguishes the Argentine case in this study is not simply macroeconomic instability or dependence on hydrocarbons, traits that it shares in varying degrees with other countries analyzed. What is distinctive about Argentina lies in the gap between the instruments it has built to boost the energy transition and its ability to sustain them over time. the Chinese presence will likely continue to respond more to concrete opportunities than to a long-term strategy. Progress is likely where there are conditions of profitability, regulatory certainty or urgent needs for financing and foreign currency, regardless of whether projects contribute to the energy transition or strengthen the existing fossil fuel-based matrix.

The Brazilian energy matrix has a balanced composition compared to international standards. In 2024, approximately half of the total primary energy supply came from renewable sources, making Brazil the country with the highest share of clean energy among the six cases analyzed in this study. This attribute is particularly significant considering the scale of the Brazilian economy and the weight of an industrial base dependent on high levels of energy consumption. In contrast to other large Latin American economies with substantial industrial sectors, such as Mexico, whose energy matrix is overwhelmingly dominated by oil and gas (~85%),29 Brazil has developed a more diversified energy matrix that is considerably less dependent on hydrocarbons.

Still, petroleum derivatives made up 34% of the matrix, while natural gas contributed around 9.6%. Hydrocarbon consumption is concentrated mainly in the transport and industrial sectors, which accounted for approximately 36.3% and 34.7% of the final energy demand, respectively.

Biomass also played an important role, representing 33.3% of the total primary energy supply, a share far higher than that observed in other economies of the region and comparable—among the countries analyzed—only to that of Chile. Sugarcane-derived products alone contributed 16.7% of the national energy supply, a reflection of more than five decades of state promotion of biofuels.

The rest of the renewables presented smaller shares, although significant. Hydroelectricity covered approximately 11.6% of the primary energy matrix. Fuelwood and charcoal contributed 8.5%, a reflection of its use in rural areas and in industrial sectors such as steel. In recent years there has also been an expansion of biodiesel, biogas and solar energy. For its part, nuclear energy contributed about 1.3%.

Unlike many countries, where the energy transition is concentrated mainly in the electricity sector, the Brazilian experience shows a broader diversification of renewables, including fuels capable of replacing oil products directly in transport, such as biofuels.

Brazil also has significant geographical advantages to continue expanding renewable energies. The potential wind capacity far exceeds what is currently installed, and solar expansion is favored by its geographical location and its extensive territory.

In general terms, the composition of the Brazilian energy structure suggests that, since the country already has a clean electricity matrix, the main margins for deepening decarbonization are concentrated outside the electricity sector. Transport represents the main bottleneck, while electrifying the industry and developing new technology chains emerge as central challenges for the coming decades.

In 2024, approximately 86% of electricity generation came from renewable sources, the highest proportion among G20 countries. Hydroelectricity was the central pillar of the system, providing 55.1% of the total generation. Wind (14.1%) and solar (9.2%) have expanded rapidly over the last decade, while biomass played a significant role thanks to the energy use of agricultural by-products. Fossil fuels played a limited role, led by natural gas (6.2%).

Brazil's electricity consumption patterns reflect the size and diversification of its economy. Industry accounted for the largest share of demand, with 35.9% of total consumption, followed by the residential sector (28.2%) and the commercial sector (17.1%). Brazil also showed significant shares in agriculture (5.3%), public sector (7.4%) and energy activities (5.7%), reflecting an electricity demand distributed across multiple productive and service segments. Transport, on the other hand, accounted for just 0.3% of the electricity consumption, showing that the electrification of transport remained marginal. This configuration suggests that Brazil's electrification potential is not concentrated in a single sector, but in the gradual expansion of electrical uses in transport, agro-industry, urban services and industrial processes, based on an already broad and diversified demand base.

This structure is the result of strategic decisions taken since the 1970s, when Eletrobras —Brazil’s largest energy company in the electricity sector— backed by a favorable regulatory framework, promoted the large-scale construction of hydroelectric dams, making use of the country's extensive river basins.³⁰ Several interviewees indicated that this historical dependence on hydroelectricity is mainly due to geographical and economic factors rather than environmental considerations.³¹

However, like other South American countries with a high hydroelectric share, Brazil remains vulnerable to droughts and hydrological variations. The electricity crisis of 2001–2002 exposed these risks and prompted a strategy to diversify the matrix, including the launch of the Alternative Electricity Sources Incentive Programme (PROINFA) in 2002 to promote investments in wind energy, biomass and small hydroelectric plants.³²

During the 2000s and 2010s, competitive renewable energy auctions helped unlock the extraordinary wind potential of Brazil's northeast, a process that accelerated as the costs of wind and solar technologies declined.³³  Solar expansion received an additional boost through the ANEEL Resolution 482/2012 (2012), which created a net-metering system for distributed generation and facilitated the rapid growth of residential and commercial photovoltaic installations.³⁴

Today, solar energy is one of the fastest-growing segments in installed capacity. The combination of regulatory incentives, abundance of natural resources and reduced technological costs has allowed a sustained expansion of variable renewables within the Brazilian electricity system.

The result is an exceptionally clean and progressively more diversified electricity system. Although hydroelectricity dominates generation, the expansion of wind, solar, biomass and nuclear energy (in process) has reduced systemic vulnerabilities and expanded the country's renewable base.

Beginning in the 2010s, China gradually became one of the most important players in Brazil's energy sector, driven by large-scale investments led by Chinese state-owned enterprises and policy banks.³⁵ Today, its participation extends along the entire energy value chain, from electricity generation, transmission and distribution, to equipment manufacturing and low-emission transport, cementing Brazil as China's leading energy partner in Latin America.

When it comes to the energy transition and low-emission manufacturing, Chinese investment has been key. The combination of a broad consumer base, a predominantly renewable electricity matrix and industrial policies aimed at strengthening domestic manufacturing, such as New Industry Brazil (NIB),³⁶ has increased the country's appeal to Chinese companies seeking to expand value chains linked to renewable energy, electric mobility and decarbonization technologies.³⁷ This alignment of interests has contributed to the sustained growth of Chinese investment in sectors considered strategic to Brazil's energy transition and helps explain the growing presence of Chinese companies in higher-value-added manufacturing activities.

Most of the Brazilian specialists interviewed agreed that international cooperation is essential for Brazil's energy transition. However, they also warned that excessive dependence on a single external partner, such as China, generates strategic vulnerabilities and limits the country's technological and industrial autonomy.³⁸

Chinese state-owned enterprises have acquired particularly significant positions in critical infrastructure. State Grid and China Three Gorges have substantial holdings in major hydroelectric generation and electricity transmission and distribution assets. Brazil has also become a key destination for the international expansion of both companies, accounting for most of their energy assets outside China.³⁹ For example, State Grid currently operates some of the largest ultra-high voltage lines in the country, connecting renewable-rich regions of the north and northeast with the major industrial centers of the Brazilian southeast.⁴⁰ This gives a Chinese state-owned company a structural presence in one of the most sensitive and strategic sectors of the national energy system.

Interviewees noted that these investments have helped expand connectivity and transmission capacity efficiently.⁴¹ At the same time, they also raised questions about supervision, the concentration of ownership of critical infrastructure and long-term technological dependence.

In the renewable sector, China's participation is mainly concentrated in manufacturing and technology supply. Although Brazil has made progress in regulatory frameworks and renewable energy expansion, it still faces difficulties developing local manufacturing capacities that accompany the energy transition. The limited domestic industrial capacity in solar components and energy storage appears as one of the main vulnerabilities identified by the interviewees.⁴²

Overall, Brazil has generated significant opportunities for complementarity with Chinese investments, particularly in sectors linked to renewable energy, storage and electric mobility. In fact, the industrial decarbonization and green reindustrialization goals promoted by the New Industry Brazil (NIB) initiative coincide with areas where Chinese companies have significantly increased their presence in recent years.

Chinese financial institutions have also played a decisive role. For example, China Development Bank, Industrial and Commercial Bank of China and Bank of China have provided credit lines on highly competitive terms,⁴³ reducing risks for Brazilian partners and allowing Chinese companies to compete aggressively in auctions for energy projects.

The electrification of transport is another growing area of cooperation between Brazil and China. BYD began domestic production of electric vehicles in 2025 at the Camaçari plant in Bahia, with an estimated capacity of 300,000 vehicles per year,⁴⁴ while Great Wall Motors (GWM) openned a plant in the state of São Paulo with an initial capacity of 50,000 vehicles per year with plans to expand to 100,000.⁴⁵ Several interviewees pointed out that these investments have both an energy and an industrial dimension, as electric vehicles could redefine the future of the Brazilian automotive industry in a context of global transformation of supply chains.⁴⁶

In turn, Chinese diplomacy complements the expansion of its companies in the country. The China-Brazil High-level Coordination and Cooperation Committee (COSBAN), created in 2004, is the main mechanism for dialog between the two governments and plays an important role in coordinating strategic projects and promoting investment. Through subcommittees dedicated to economic, financial, trade and environmental issues, COSBAN facilitates coordination between public and private actors and helps identify priority areas for bilateral cooperation.⁴⁷

Hydrocarbons have also been central to bilateral economic ties. In the first quarter of 2026, Brazilian oil exports to China reached record levels, driven by rising offshore production and disruptions to supply lines in the Middle East.⁴⁸ This continued expansion underscores the role of oil in Brazil-China relations even as Brazil advances its climate agenda and energy transition.

At the same time, China's growing presence in strategic sectors of the Brazilian economy has also raised concerns over governance, regulatory oversight and social and environmental sustainability.

The Belo Monte dam is emblematic of these challenges. Located in the Amazon, the project was promoted by the Brazilian government as a major component of the country's energy infrastructure and was later connected to transmission lines operated by the state-owned State Grid Corporation of China. Its construction and associated infrastructure generated considerable controversy over the displacement of local communities,⁴⁹ forest flooding, ecosystem disruption and shortcomings in the environmental licensing process.⁵⁰ Social and environmental organizations also alleged that political pressure to accelerate the project weakened consultation mechanisms and regulatory oversight.⁵¹

More recently, labor and regulatory disputes have also emerged. The most visible case has been the construction of the BYD electric vehicle plant in Bahia, where Brazilian labor prosecutors denounced “slavery-like” conditions for hundreds of Chinese workers subcontracted by construction companies linked to the project, including alleged excessive working hours, passport confiscation, restrictions on movement, and degrading housing conditions.⁵² This episode has garnered attention from authorities, reinforcing public concerns about regulatory capacity, state oversight, and compliance with labor standards in large-scale projects linked to foreign capital.

Taken as a whole, Brazil represents one of the deepest and most complex cases of Chinese participation in South America's energy transition. Unlike in many other countries in the region, Brazil's relationship with China extends beyond economic ties to a broader agenda of political cooperation, reflected in forums such as BRICS and in shared positions on global governance reform, stronger multilateralism and reduced dependence on Western-dominated financial institutions. This depth of engagement also presents Brazil with a strategic dilemma. The same industrial, technological and financial capabilities that make China an increasingly important partner may also complicate Brazil's efforts to develop its own technological capabilities, strengthen domestic industry and achieve greater productive autonomy.

Despite its strong environmental regulations, Chile's matrix is still dominated by fossil fuels. In 2024, oil was the main component at 27.2%, followed by natural gas at 19.1% and coal at 10.1%. This composition reflects Chile's strong structural dependence on imported hydrocarbons, resulting from the limited availability of national oil and gas reserves.

Renewable sources, in turn, accounted for just over 40% of the primary energy matrix. Biomass was the main contributor, combining traditional fuels such as fuelwood and charcoal with industrial byproducts like black liquor, together representing 27.7% of total supply. Along with Brazil, Chile stands out among the six focus countries for the structural weight that biomass maintains within its energy matrix. Hydroelectricity contributed 7%, while solar (5%) and wind (2.9%) maintained modest shares within the primary matrix, despite their rapid growth in the electricity sector. Geothermal and biogas were marginal, with less than 1% each.

On a different note, sectoral consumption patterns help explain the divergence between a low-emission electricity matrix and an energy matrix that is still fossil-fuel-intensive. The industry accounted for the largest share of final energy consumption (38.3%), driven mainly by mining, cement and steel activities that require coal and natural gas for high temperature processes. Unlike the other countries in this study, where the transport sector was the main consuming sector, in Chile energy demand was led by industrial activity. This configuration reflects the weight of mining within the Chilean economy. As the world's leading copper producer and second-largest lithium producer,¹⁴ after Australia, Chile concentrates a significant share of its energy demand in energy-intensive extractive and industrial activities, many of which supply critical inputs for the supply chains of the global energy transition.

Transport was the second-largest consuming sector (34.8%), holding a strong dependence on imported diesel and gasoline. Although the residential sector had a lower share of total consumption (18.9%), the widespread use of liquefied petroleum gas (LPG) and biomass for heating and cooking played a significant role in the country's energy demand. Finally, the commercial and public sectors accounted for 6.2% and 1.3% of final consumption, respectively.

For Chile, the path toward a low-emission energy matrix runs mainly through the transformation of the transport and industry sectors, which make up most of the country's fossil fuel consumption.

Chile has built one of the electricity systems with the highest share of renewable energy in the world, despite lacking the ample hydroelectric endowment that characterizes many of its regional peers. In 2024, 78.1% of the electricity delivered to the grid came from renewable sources, led by hydroelectricity (29.5%), solar energy (20.8%) and wind energy (12.1%), followed by black liquor (7.9%), biomass (7.1%), geothermal energy (0.34%) and biogas (0.24%). Fossil fuels accounted for just over a fifth of electricity generation, mainly from coal (11.3%) and natural gas (9.5%), while petroleum derivatives maintained a marginal share of less than 2%.

Chile's electricity consumption patterns reflect the weight of productive activities within the national economy. The industrial sector, which in official statistics also includes agricultural activities, accounts for 60.1% of total electricity demand, the highest proportion among the focus countries. The residential sector accounted for 19.2% of consumption, followed by the commercial and public sector at 15.7%, while transport accounted for just 1.7% of the electricity demand.

An advisor at G-Advisor in Chile noted that the country's progress on energy stems from public-policy decisions sustained across several consecutive governments.¹⁵ Chilean governments have used competitive tenders, long-term contracts and clear grid-planning signals to attract private investment and accelerate renewable deployment.

The country's geography has also favored the development of non-hydroelectric renewables. The Atacama Desert's extraordinary levels of solar radiation, combined with strong wind corridors in the north and south of the country, allowed a rapid expansion of solar and wind generation (see Chapter 1, Figures 1 and 2). As a result, solar energy already exceeds gas and coal in electricity generation, although a decade ago its contribution to the system was non-existent.¹⁶

This development has been particularly significant in the north of the country, where much of the Chilean mining activity is concentrated. The expansion of large-scale solar projects has created significant links between the energy sector and the mining industry, making the latter one of the main drivers of demand for renewable electricity.¹⁷

Meanwhile, wind energy, although still smaller in total generation, has expanded steadily and adds complementarity to the system at different times of the day and year, helping to diversify the electricity matrix.

Despite the rapid expansion of renewables, one of the main challenges for Chile's energy transition is electricity transmission infrastructure. The grid spans almost 3,000 kilometers, yet much of the solar and wind generation lies at the country's extremes, whereas electricity demand is concentrated in the central zone.¹⁸ This configuration has led to recurrent problems of congestion, renewable energy spill and operational vulnerabilities in critical transmission corridors, a situation that has become evident during recent episodes of national power outages.

These limitations have shaped the pace of the energy transition. Although coal plants are being gradually withdrawn, the process has slowed down due to concerns about system reliability, keeping some units in strategic reserve status.¹⁹ At the same time, natural gas plays a significant role as a source of backup and operational flexibility, helping to stabilize the electricity system and compensate for both the variability of renewable energies and the effects of periods of drought on hydropower generation.

The involvement of Chinese companies in Chile's energy transition has expanded rapidly over the past decade, consolidating their presence in one of the most open, competitive and institutionally stable energy markets in Latin America. Chile’s strong regulatory frameworks, transparent tenders and diversified funding sources have created conditions that prevent any foreign actor from concentrating ownership in the sector. Within this environment, Chinese companies have established themselves as relevant actors in renewable generation, transmission, distribution and electrification of transport, mainly thanks to competitive costs, rapid implementation and attractive financing terms.

Generally speaking, China’s presence in Chile’s energy sector has followed two distinct modes of engagement.. On the one hand, companies such as JA Solar and Goldwind are mainly involved as suppliers of equipment and technology for solar and wind projects, especially in northern Chile and the Atacama Desert. Moreover, companies such as SPIC, State Grid and China Southern Power Grid have strengthened their presence through the acquisition and operation of strategic generation, transmission and distribution assets, such as Pacific Hydro, CGE and Chilquinta. Together, these two approaches reflect a broader pattern in which Chinese involvement combines integration into global renewable-technology supply chains with investments aimed at controlling and managing existing energy infrastructure.²⁰

Moreover, transmission infrastructure has become one of the most strategic areas of Chinese participation in the country. State Grid Corporation of China's acquisition of the Compañía General de Electricidad (CGE) gave China's state-owned company control over the country's largest private electricity distributor, with a presence in 14 regions and a share of more than 40% of the national distribution market.²¹ The transaction also reflects the gradual shift from European to Chinese ownership in strategic segments of regional energy infrastructure, considering that CGE had previously been owned by the Spanish energy company Naturgy.²²

The acquisition also triggered a broad public debate over the implications of a foreign state‑owned company controlling a significant share of Chile's electricity infrastructure. The Chilean Consumers and Users Organization (ODECU) tried unsuccessfully to challenge the approval of the transaction by the National Economic Prosecutor's Office (FNE), while a group of deputies introduced a constitutional reform bill aimed at establishing mechanisms to review and oversee foreign investment in strategic sectors. In this sense, State Grid's acquisition of CGE marked one of the first episodes in which Chinese investment began to be discussed in Chile not only from an economic perspective, but also in terms of security, strategic autonomy and geopolitical considerations.²³

Also worth mentioning is the Kimal–Lo Aguirre transmission line, developed by the Transelec consortium together with China Southern Power Grid.²⁴ Considered one of the most important electrical integration works in the country, the line seeks to resolve connection and distribution challenges between the areas of high solar generation in the north and the main urban and industrial hubs in central Chile, facilitating the incorporation of new renewable capacity into the national electricity system.²⁵ Several of the interviewees pointed out that this type of investment positions Chinese companies within particularly sensitive segments of Chile's energy infrastructure.²⁶

In the electric mobility sector, there is also a significant presence of Chinese manufacturers, especially in urban public transport. The expansion of the electric fleet in Santiago and some provincial cities has been associated with a wide range of Chinese companies, including Zhongtong, Yutong, King Long, BYD, Foton and Fencer. According to recent studies, in 2025, Zhongtong and Yutong jointly concentrated more than 70% of electric bus sales in Chile.²⁷

On this point, 85% respondents directly linked electromobility to energy transition, while 71% identified China as the most influential foreign actor in this sector. They also noted that Chinese suppliers have been instrumental in the development of large-scale electrified public transport. At the same time, some interviewees warned that the increasing concentration of Chinese technology on buses, batteries and charging infrastructure could limit technological diversification and reduce space for local industrial development.²⁸

Although Chinese companies play a significant role in Chile's energy sector, it is more diversified in terms of foreign participation than those of many neighboring countries. European companies such as Engie,²⁹ Celeo Redes³⁰ and Elecnor³¹ maintain relevant positions in energy generation, transmission and infrastructure, while institutional investors such as the Dutch fund APG hold significant shares in some of the country's main transmission assets.³² This diversity of investors helps to avoid excessive dependence on a single partner, even as Chinese companies expand their presence in critical segments of Chile's energy infrastructure.

Given the importance of copper both for the Chilean economy and for the global supply chains tied to the energy transition, it is also worth considering the Chinese presence in this sector. In Chile, this presence is manifested through trade, demand for raw materials and integration into supply chains, rather than through direct ownership of mining assets. Although this pattern reflects a combination of historical, regulatory and business factors—and not necessarily a deliberate strategy of exclusion—it contrasts with the case of Peru, where Chinese companies control some of the country's major copper projects. This difference highlights the diversity of ways in which China participates in South American mining, as well as the specificity of the Chilean model of governance and market openness.

On the financial side, China plays a far less prominent role in Chile, a clear contrast with countries such as Argentina, Brazil and Ecuador, where Chinese bank financing has maintained an active and substantial presence. Specifically, recent research shows that, in terms of energy infrastructure, Chile did not record any loans from Chinese banks between 2001 and 2020, while it did receive financing from US‑led banks and multilateral organizations.³³ However, most respondents pointed out that the main comparative advantage of Chinese companies in Chile lies not in direct access to finance or political influence, but in their ability to combine competitive costs, large‑scale manufacturing and integrated packages that include supplier‑linked financing and engineering, procurement and construction (EPC) services, helping strengthen their position in infrastructure and energy tenders.³⁴

In summary, Chile's case reveals a form of Chinese integration different from that observed in other South American countries. Unlike Argentina, Ecuador or Brazil, where Chinese state financing and intergovernmental relations have played a significant role in the expansion of energy projects, China's presence in Chile has developed mainly through market mechanisms and business competition. Although Chinese companies have secured significant positions in renewable generation, electricity transmission and electromobility, they have done so within an environment characterized by stable rules, competitive tenders and a high diversity of foreign investors. A notable difference is that, unlike in several neighboring countries, Chinese companies in Chile have not been associated with major corruption cases or environmental controversies, reinforcing the perception of a more regulated and predictable investment environment. As a result, China's participation in Chile's energy transition has derived mainly from its companies' ability to compete on costs, technology and scale, shaping a pattern of economic integration closer to market logic than to the dynamics of intergovernmental cooperation that have characterized its presence in other countries of the region.

Fossil fuels dominate Colombia’s energy matrix, accounting for more than three quarters of total primary energy supply. Oil alone constitutes 43.3%—the second‑highest share among the six focus countries, surpassed only by Ecuador—while natural gas (21.3%) and coal (13.8%) make Colombia the only case in which all three major fossil fuels retain substantial weight. Renewable energies represent 21.7%, driven primarily by hydroelectricity (9.6%) and traditional biomass such as firewood and bagasse (10%).

Colombia’s energy demand is similarly concentrated in fossil‑intensive sectors. Transport is the largest consumer at 38.7% of total demand, relying almost entirely on gasoline and diesel. Industry and agriculture together account for 29.5%, with extensive use of natural gas for thermal processes and fossil fuels for heat‑intensive activities such as cement and steel. The residential sector represents 19%, driven by high LPG consumption for cooking and electricity for household uses. The prevalence of liquid fuels in transport and natural gas in industry illustrates why fossil dependence is so firmly embedded in Colombia’s energy system.

Hydroelectricity remains the backbone of Colombia’s electricity system, contributing around 63% of total generation in 2024. Fossil fuels account for most of the rest, led by natural gas (19.2%) and coal (11.5%). Wind energy continues to be marginal at less than 1%, whereas solar has grown rapidly and now represents about 4% of electricity generation.

Electricity consumption is distributed relatively evenly across the residential, industrial and commercial/public sectors, a trait it shares with Argentina among the focus countries. The residential sector accounts for 31.7% of total demand, followed by industry at 26.9%, while the commercial and public sector represents 22.9%. This distribution aligns with the balanced weight of these sectors in the national economy. Transport is still marginal at just 0.13% of electricity demand, underscoring that the electrification of mobility is one of the main areas for potential expansion. It should be noted, however, that official statistics also report 17.6% of consumption under “unidentified use,” an unusually high proportion in energy use statics, which limits a more precise characterization of electricity demand by sector.

Beyond hydroelectricity, the incorporation of other renewable sources has progressed at a considerably slower pace. Although solar and wind projects are beginning to expand—such as floating solar power in Córdoba and community wind projects in La Guajira—¹⁶ their contribution is still marginal within the national electricity system.

Most interviewees noted that transmission infrastructure has fallen behind the pace of project development, creating bottlenecks that slow the addition of new capacity and reinforce reliance on backup thermal generation. “The panels are ready, but the network is not,” as one specialist remarked.¹⁷ Fully exploiting Colombia’s solar (≈30 GW) and wind (≈32 GW) potential will require sustained investment in transmission expansion, storage and grid modernization.¹⁸

Looking at the overall picture, electricity consumption patterns show considerable room to advance the electrification of transport and industry, as well as greater incorporation of non-hydroelectric renewables. This potential is especially visible in La Guajira, which concentrates the best wind and solar resources in the country.¹⁹

Chinese companies’ involvement in Colombia’s energy sector has centered on hydrocarbon, renewable energy, electric mobility and transmission infrastructure projects. Despite being far smaller than in any of the other countries analyzed, their presence has become noticeably more visible in the past five years.

In solar energy, the state‑owned PowerChina has participated in the development of ten photovoltaic projects totaling roughly 567 MW, making it one of the most visible Chinese actors in Colombia’s renewable energy market.²⁰ Although this figure includes projects at different stages of development and does not correspond entirely to installed, operating capacity, it nonetheless helps gauge the company’s significance in a country that, as of May 2026, had approximately 3,300 MW of solar photovoltaic capacity in operation.²¹ Among these projects, the 108 MWp Tepuy solar park in Caldas stands out as one of the largest‑scale solar developments led by a Chinese company in Colombia.²²

As in other countries in the region, the expansion of solar energy in Colombia has been accompanied by a strong presence of Chinese suppliers along the supply chain. As Defelipe noted: “Almost 100% of Colombia’s photovoltaic panels are Chinese, the technology, the entry, everything, and that already implies dependence on maintenance and operation.”²³ The development of domestic industrial capacities in this area is virtually non-existent.

With regard to electric mobility, interviewees identified the transport sector as one of the main long-term decarbonization challenges due to its heavy reliance on petroleum derivatives.²⁴ Although Colombia has a national strategy to promote electric mobility supported by instruments such as the 2019 Law 1964²⁵ and the National Strategy for Electric Mobility,²⁶ the most visible advances have been concentrated in Bogota and Medellin, where local governments have led the electrification of public transport.²⁷

Chinese companies have played a central role in this process. BYD, for example, supplies around 96% of the electric buses in operation in the country,²⁸ which has helped position Colombia among the Latin American leaders in public-transport electrification.²⁹ More recently, the Chinese automaker announced the assembly of electric buses and trucks in Colombia through partnerships with local companies, an initiative that aims to incorporate higher levels of domestic value added and reflects a gradual evolution beyond the mere importation of vehicles.³⁰

China’s presence also extends to the modest private market for electric vehicles. In 2025, BYD alone accounted for 52.4% of new national electric-vehicle registrations, while other Chinese manufacturers, such as Chery, have expanded their share.³¹

Chinese involvement also extends to major electricity-infrastructure projects. The most emblematic case is Hidroituango, the country’s largest hydroelectric plant. As mentioned above, the project has been marked by years of delays, accidents, cost overruns and public controversy. Although its development has been led by Colombian actors, Chinese companies and financial institutions have played an important role at different stages of the project. Its financing structure included the participation of the Industrial and Commercial Bank of China (ICBC) through a vehicle managed by the Inter-American Development Bank (IDB).³² The most recent expansion was likewise awarded to the consortium made up of China’s Yellow River and the Colombian firm Schrader Camargo, reflecting the gradual expansion of Chinese involvement in strategic segments of Colombia’s energy infrastructure sector.³³

It is worth noting that, as all interviewees in Colombia emphasize, the vast majority of Hidroituango’s governance and operational problems long predated Chinese involvement.³⁴ However, the project illustrates how Chinese companies have ended up associated with highly politicized, high-visibility infrastructure projects, inheriting not only commercial opportunities, but also reputational risks generated by fragmented governance structures and recurring conflicts surrounding large infrastructure projects.

This dynamic can also be seen in Line 1 of the Bogota metro, awarded in 2019 to a consortium led by China Harbour Engineering Company (CHEC) and Xi’an Metro.³⁵ It is a long-awaited project for a city of around eight million inhabitants that, despite registering some of the highest levels of traffic congestion in the world,³⁶ does not have a metro system. Precisely for that reason, the project has become deeply politicized, with recurring delays, design disputes and tensions between local and national authorities that have intensified scrutiny over Chinese participation.

Interviewees noted that the main risks surrounding these projects stem less from the conduct of Chinese companies than from Colombia’s weak institutional coordination, fragmented regulatory structures and inconsistent mechanisms for environmental and community consultation. As one interviewee summed up: “Chinese companies deliver fast and cheap, but our institutions are slow and fragmented. The risk is not China; it is our inability to manage complexity.”³⁷

The situation in the La Guajira department provides an illustrative example of these challenges. Conflicts with indigenous communities, complex environmental licensing processes and security risks associated with illegal armed groups have delayed numerous wind and solar projects.³⁸ The region also faces transmission limitations, having historically been peripheral to the national electricity system, which hinders the integration of new large‑scale renewable capacity.

Interviewees noted that Chinese companies face essentially the same operational challenges as other foreign companies. Despite this, due to China’s growing geopolitical visibility in a country historically aligned with the United States, delayed or controversial projects with Chinese participation are often interpreted through a geopolitical lens rather than as manifestations of Colombia’s structural governance weaknesses. At the same time, some specialists warned that greater technological dependence on Chinese companies in sectors such as energy, mining and transportation could eventually complicate relations with the United States.³⁹

Overall, Colombia’s energy sector shows wide diversification in terms of foreign participation. European companies such as Enel maintain relevant positions in renewables and transmission, while Isagen, backed by Canadian capital, controls major hydroelectric assets such as San Carlos. The United States, for its part, has focused primarily on technical cooperation rather than direct investment. Within this context, China remains an emerging rather than dominant actor. Nevertheless, its rapid expansion in electric mobility, solar generation, and strategic infrastructure gives it a visibility that increasingly exceeds its current market share and points to significant potential for future expansion.

In terms of consumption patterns, transport accounts for more than half of Ecuador’s final energy demand (56%), the highest proportion across the cases analyzed. Peru follows with 44%, while the remaining countries fall below 40%. This concentration reflects the weight of road transport and its heavy dependence on diesel and gasoline, making the sector the main driver of domestic consumption of petroleum products. The industrial sector comes next with 17.2%, driven by energy‑intensive activities such as cement, food processing, ceramics and manufacturing, all of which rely heavily on fossil fuels for thermal generation and industrial processes. Residential consumption, at 13.6%, is the lowest among the countries considered.

This consumption structure has important implications for the country’s energy security. Although Ecuador is a net exporter of hydrocarbons and has a robust oil industry, it still relies heavily on refined fuel imports to meet domestic demand. The apparent contradiction stems primarily from structural limitations in national refining capacity. Ecuador mainly produces and exports heavy crude oil from the Amazon region,¹⁵ while domestic consumption is concentrated in refined products such as diesel, gasoline and LPG. However, the country’s major refineries face problems of technological obsolescence and frequently operate below capacity,¹⁶

In terms of consumption patterns, transport accounts for more than half of Ecuador’s final energy demand (56%), the highest proportion across the cases analyzed. Peru follows with 44%, while the remaining countries fall below 40%. This concentration reflects the weight of road transport and its heavy dependence on diesel and gasoline, making the sector the main driver of domestic consumption of petroleum products. The industrial sector comes next with 17.2%, driven by energy‑intensive activities such as cement, food processing, ceramics and manufacturing, all of which rely heavily on fossil fuels for thermal generation and industrial processes. Residential consumption, at 13.6%, is the lowest among the countries considered. This consumption structure has important implications for the country’s energy security. Although Ecuador is a net exporter of hydrocarbons and has a robust oil industry, it still relies heavily on refined fuel imports to meet domestic demand. The apparent contradiction stems primarily from structural limitations in national refining capacity. Ecuador mainly produces and exports heavy crude oil from the Amazon region,¹⁵ while domestic consumption is concentrated in refined products such as diesel, gasoline and LPG. However, the country’s major refineries face problems of technological obsolescence and frequently operate below capacity. ¹⁶

Ecuador’s electricity sector presents a relatively favorable outlook. In 2024, 65% of national supply came from renewable sources. Hydroelectricity, which provide 63.5% of total generation, acted as the backbone of the system, while other renewables—including biomass—accounted for only 1.5%. Hydrocarbon‑based generation reached 30.86%, distributed among fuel oil (11.2%), diesel (9.3%), petroleum (5.3%), natural gas (4.3%) and other derivatives (0.7%). Imported electricity—mainly from Colombia—added a further 3.6% to national supply.

Ecuador’s electricity consumption patterns reveal a mix of industrial predominance and diversified demand. Industry accounted for 41.0% of total electricity use, followed by the residential sector (28.6%) and commercial and public activities (26.7%), while transport represented only 0.17% of electricity demand. This distribution becomes particularly relevant when contrasted with the national energy matrix, where transport absorbed more than half of final energy consumption. The gap underscores that most productive and urban activities already rely on electricity, whereas mobility has been almost entirely dependent on petroleum fuels. From an energy‑transition perspective, this suggests that the greatest opportunities for expanding electricity use lie in the electrification of transport, rather than in the sectors that currently dominate electricity demand.

As noted above, Ecuador’s electricity system relies heavily on a small number of large power plants. With 1,500 MW of installed capacity, Coca Codo Sinclair is the country’s largest hydroelectric facility. However, its effective contribution to generation varies with hydrological conditions, available flow, operational restrictions, sediment accumulation and the technical problems that have emerged since it entered operation in 2016. For this reason, it should be assessed not only by its installed capacity but by its actual availability and the energy it effectively produces.

In 2024, Coca Codo Sinclair contributed approximately 31.7% of the national hydroelectric generation. Together with the Paute Integral Complex—composed of the Mazar, Molino and Sopladora plants—it accounted for more than two thirds of the country’s hydroelectric generation. Combined with a nearly 20% share of thermoelectric generation based on fuel oil and diesel, Ecuador’s electricity system exhibits a high vulnerability to hydrological shocks and to volatility in international fuel markets.

Paradoxically, Ecuador has an important solar and wind potential that is still underdeveloped. Over the past decade, factors such as limited investment, regulatory uncertainty and difficulties in bringing new projects to fruition slowed the expansion of these technologies.¹⁷ That said, signs of greater dynamism have emerged in recent years. Among them is the La Ceiba photovoltaic project, located in the province of Loja, designed to reach a total capacity of up to 1,500 MW, with its first phase providing for the installation of 200 MW. If completed, it would become the largest solar plant in the country.

The convergence between urgent fiscal needs, political affinities and opaque financing mechanisms helped consolidate a particularly close relationship between Ecuador and China during the years of President Correa (2007–2017). The bilateral relationship was structured mainly through state-to-state agreements that facilitated the financing and execution of large infrastructure projects, in a context where negotiation and decision-making were heavily concentrated in the Executive Branch.¹⁸

What began as an alternative source of financing and a partner aligned with Correa’s international strategy gradually evolved into a broad and expanding presence in the construction of strategic road and energy infrastructure. Today, Chinese companies and banks operate basically across the entire value chain of Ecuador’s electricity sector—from financing and building power plants to developing transmission infrastructure and new solar and wind projects.¹⁹

First, Chinese state-owned enterprises played a central role in Ecuador’s hydroelectric expansion. Sinohydro built the Coca Codo Sinclair dam;²⁰ China Gezhouba Group took part in the construction of the Sopladora plant;²¹ and a subsidiary of the state-owned Three Gorges was responsible for the civil works of Toachi-Pilatón.²² As Carolina Viola states, these projects were structured through turnkey contracts that bundled design, procurement, construction and, in some cases, financing by Chinese state-owned firms.²³

Although this model transformed Ecuador’s electricity infrastructure and rapidly expanded hydropower capacity, it also consolidated a strong dependence on Chinese suppliers and technology. At the same time, the combination of large-scale contracts, deficient oversight mechanisms, and a high concentration of decision-making in the national executive branch facilitated the emergence of controversies related to cost overruns, construction defects, labor disputes, corruption allegations and environmental degradation.

According to the NGO Fundación Mil Hojas, “the economic and technological risks associated with China’s participation in Ecuador’s energy transition are reflected in the systematic presence of cost overruns, with projects whose budgets are doubled or even tripled, —as well as in a total technological dependence that prevents any effective transfer of knowledge”.²⁴ Mil Hojas also pointed out that the poor construction quality forced the Ecuadorian State to allocate additional resources to repair or complete projects, citing the Toachi-Pilatón plant as a contentious case in which the Chinese contractor failed to deliver, leaving a Russian company with the task of completing the work.²⁵

This non-compliance contributed to prolonged delays in the complex’s schedule. Part of the infrastructure, corresponding to one of the two plants (Sarapullo), went into operation a decade later than originally planned, while the completion of the second plant (Alluriquín) was delayed by roughly fourteen years.²⁶

Chinese policy banks played a key role in these projects. Between 2010 and 2020, Ecuador received more than US$ 18 billion in loans, a significant part of them linked to energy and infrastructure projects. The Export-Import Bank of China and China Development Bank provided credit lines with fewer governance constraints than multilateral creditors, often using repayment mechanisms tied to oil exports.²⁷

The natural-resource-backed financing modality not only restricted Ecuador’s fiscal room for maneuver, but also contributed to a refinancing dynamic in which new loans became increasingly necessary to manage existing obligations.

The most symbolic and controversial case has been the Coca Codo Sinclair project. Built by Sinohydro and financed by Chinese policy banks, it was conceived as a flagship example of bilateral Sino-Ecuadorian cooperation. Despite this, as the Ecuadorian scholar Carolina Viola points out, the project became an “emblematic case of the environmental and structural impacts stemming from Chinese involvement in Ecuador.”²⁸ The project was implemented in an ecologically sensitive area, causing significant damage to local ecosystems and indigenous communities, as well as severe erosion of the Coca River basin that has affected transport routes to the Amazon.

The plant has also faced persistent technical problems, including cracks in turbines and sediment abrasion, which led the Ecuadorian government to initiate an international arbitration against Sinohydro.²⁹ For Viola, this case illustrates some of the tensions inherent in the China-Ecuador relationship, particularly when large infrastructure projects are developed under opaque contractual arrangements and with limited oversight capacities.³⁰ In this context, social, environmental and financial costs tend to fall disproportionately on the host country.

In April in 2026, Ecuador dropped its legal dispute with the Chinese construction firm after reaching an agreement that includes compensation of approximately US$ 400 million, of which US$ 200 million would be in cash and US$ 200 million would be allocated to electricity generation projects,³¹ in addition to transferring the operation and maintenance of Coca Codo Sinclair to the Chinese company for a period of 25 years. Under the agreement, PowerChina—the parent company of Sinohydro—would undertake the repairs associated with the structural failures detected at the plant.³²

Additionally, in the case of energy projects, financing conditions frequently encouraged or required the hiring of Chinese companies and suppliers. This arrangement enabled the rapid mobilization of resources and technical capacities, but it also reduced competition in procurement processes and reinforced dependence on technology, equipment and specialized expertise from China. Interviewees consistently identified this combination of financing and execution as the main advantage over other international actors, but also as the main risk of China’s involvement.³³

As Chinese companies expanded beyond large hydroelectric projects into areas such as solar power, electric mobility and other components of the energy transition, China’s institutional and diplomatic footprint in Ecuador grew in parallel. This evolution turned the energy relationship into an increasingly visible pillar of bilateral ties. As Viola notes, “Chinese diplomacy plays an active role in promoting its companies in Ecuador through official sponsorships, agreements and media strategies. Government agencies fund visibility campaigns to improve the image of Chinese companies and projects.”³⁴

The coordination between the Chinese Embassy, state-owned enterprises and the Chinese media illustrates how Beijing deploys a state-to-state model that combines investment promotion, political messaging and development assistance. While the model helped mobilize capital quickly, it also deepened the opacity of bilateral agreements and blurred the line between trade and political participation.

In Ecuador, there is a clear disconnect between official transparency commitments, public oversight and actual procurement practices in the way large energy contracts with China have been managed. Most of the agreements with Chinese policy banks and companies were negotiated directly through executive channels, bypassing ordinary mechanisms of public procurement and parliamentary oversight. This concentration of power weakened oversight, accountability and public trust. Notwithstanding, assessing this relationship exclusively from its institutional deficits offers an incomplete picture.

Despite all the problems and controversies documented, plants built by Chinese companies significantly expanded the country’s electricity generation capacity, reduced electricity imports and allowed seasonal energy exports to Colombia and Peru. As a result, hydroelectricity today represents approximately 70% of Ecuador’s electricity generation, placing Ecuador well above the global average in renewable generation. The result was a profound transformation of the energy sector that strengthened the country’s generation capacity, but also consolidated long-term vulnerabilities in fiscal stability, technological autonomy, institutional transparency and environmental governance. These vulnerabilities emerged from the interaction between the financing and investment modalities promoted by China and the institutional weaknesses that characterized the planning, procuring and oversight of Ecuador’s strategic projects.

In 2023, Peru’s energy matrix was dominated by fossil fuels, which accounted for about 80% of the total primary energy supply. Natural gas and liquids associated with its production constituted the main component of the national energy supply, contributing approximately 56.7% of the total, the highest share among the six focus countries. Oil and its derivatives accounted for 21.8%, while coal maintained a marginal presence of just 1.9%. This configuration made Peru, together with Argentina, one of the two cases in the study where dependence on fossil fuels was structured primarily around natural gas rather than oil.

The centrality of natural gas is primarily the result of the development of the Camisea complex, the country’s main gas field and one of the most important energy projects of the past decades. Domestic gas production has partially reduced Peru’s exposure to volatility in international hydrocarbon markets. That said, the country’s limited refining capacity entails a significant dependence on imported fuels, albeit at levels lower than those observed in Ecuador.

Renewable sources accounted for about one fifth of the total primary energy supply. Hydroelectricity contributed 9.9%, while biomass accounted for around 8.9%. However, much of this biomass corresponded to traditional sources such as fuelwood, charcoal and bagasse, used mainly in rural households and low-efficiency industrial activities. Wind and solar energy maintained marginal shares within the energy matrix, with only 0.43% and 0.34%, respectively. Similar to Colombia, the share of renewable energy within the primary energy matrix was considerably lower than what the weight of hydropower in electricity generation might suggest.

Sectoral consumption patterns help explain the persistence of this dependence on fossil fuels. In 2023, transport represented the main consuming sector, concentrating approximately 44.3% of total energy demand, the second highest share among the six countries analyzed, surpassed only by Ecuador. Industry and mining jointly accounted for 28.9% of final consumption, driven mainly by the use of natural gas for thermal processes and energy-intensive productive activities. The residential sector absorbed 17.7% of energy demand, while the commercial and public sectors accounted for 5.4% and 1.3%, respectively. This consumption structure shows that Peru’s main decarbonization challenges are concentrated in transport and energy-intensive industrial sectors

Peru’s electricity matrix is considerably more diversified and less carbon-intensive than its energy matrix. In 2023, renewable sources accounted for 53.4% of national electricity generation. Hydroelectricity was the main source, contributing 46.8% of the total, followed by wind (3.8%), solar (1.8%) and biomass (1%). Fossil fuels made up the remaining 46.6%, almost entirely dominated by natural gas, which supplied 44.1% of the electricity generated. Diesel and fuel oil maintained marginal shares of 1.9% and 0.6%, respectively.

Electricity consumption patterns reflect the weight of productive activities in Peru’s economy. In 2023, industry and mining jointly accounted for 58.1% of total electricity demand, making them by far the main consuming sector. The residential sector represented 20.1% of demand, followed by commercial activities with 18.6%. By contrast, transport used only 0.2% of the electricity consumed in the country, underscoring the very limited electrification of mobility in Peru. The high share of industry and mining sets Peru apart from most of the countries analyzed and reflects the importance of the extractive sectors within its economy. This structure has made large mining companies increasingly relevant in the evolution of the electricity sector, particularly through their demand for new generation capacity and long‑term supply contracts. At the same time, the limited participation of transport in electricity consumption highlights the considerable scope for advancing the electrification of mobility as part of a broader strategy to reduce greenhouse gas emission.²¹

China’s presence in Peru’s energy transition is reflected primarily in its growing participation in mining, electricity distribution and technology supply chains. This trajectory has unfolded in parallel with the deepening of economic ties between the two countries, particularly since the entry into force of the Peru-China Free Trade Agreement (FTA) in 2010.

The tariff preferences established under the FTA have contributed to the growth of bilateral trade, especially in minerals and metals, reinforcing the centrality of extractive sectors within the economic relationship between the two countries.²² However, several interviewees noted that the agreement lacks modern environmental and social provisions and that any future update should incorporate regulations on sustainability, transparency and governance.²³

Mining is the main meeting point between China’s presence and the Peruvian energy transition. Copper and zinc exports generate a significant portion of the country’s tax revenues, while mining activity absorbs approximately one third of the national electricity demand. This makes the sector one of the main engines of the Peruvian economy and, at the same time, a central actor in any energy-transition strategy.²⁴ Chinese companies such as MMG at Las Bambas and Chinalco at Toromocho occupy key positions in this sector.

The most iconic case is the Las Bambas copper mine, operated by MMG since its acquisition in 2014 from Glencore, the Swiss commodities and mining multinational.²⁵ Located in the south of the country, it is one of the largest copper mines in the world, with a production capacity of close to 400,000 tons per year and a contribution of approximately 15% to the national copper production.²⁶ The transfer of ownership took place in a context marked by unresolved social and environmental disputes. For its part, the Peruvian State allowed the operation to proceed without adequate oversight mechanisms or prior consultation with the affected communities, a failure that, as detailed below, led to prolonged conflicts.

As one of the interviewed experts explained, “in the Peruvian context, the energy transition exposes deep structural tensions linked to China’s presence and to emblematic cases such as Las Bambas, where the change in ownership without prior consultation sparked prolonged conflicts and revealed the State’s inability to ensure a just transition.”²⁷

It should be noted that this dynamic is not exclusive to Chinese companies. It reflects how extractive industries from different backgrounds operate in contexts characterized by persistent governance deficits, unmet social expectations and inadequate conflict-management mechanisms. What distinguishes the Chinese case is the combination of state-backed financing and diplomatic coordination that often accompanies these projects, integrating them into a broader bilateral relationship.

As Cynthia Sanborn, a specialist in Peru-China relations, points out, “The Chinese are present in mining; they have seven significant projects in the Ministry’s portfolio, five of which are already operational. They also hold solar and wind assets in Marcona through the acquisition of Luz del Sur, which already had renewable projects.”²⁸ This observation illustrates how China’s presence in Peru links activities that are often analyzed separately. Mining, renewable generation and electricity infrastructure are part of the same network of investments linked both to the production of strategic minerals and to the energy supply required for their extraction and processing.

China’s expansion has also reached strategic segments of the electricity sector. In 2020, China Yangtze Power, part of the Three Gorges group, acquired Luz del Sur from the U.S. company Sempra Energy. Four years later, China Southern Power Grid completed the acquisition of Enel Peru, including its operations in Lima. This operation was the largest Chinese acquisition in the Peruvian energy sector to date and gave Chinese state-owned companies control of the capital’s two main electricity distributors.

As Sanborn summarizes, “the two main distributors and generators in Lima are now under Chinese control.”²⁹ Beyond market share, these assets provide stable regulated income and a long-term strategic position within the country’s most important electricity market. At the same time, they allow Chinese companies to consolidate their presence in one of the most profitable and politically significant segments of the Peru’s energy system.

Their presence is concentrated mainly in specific hydroelectric and solar projects, often developed through engineering, procurement and construction (EPC) contracts led by companies such as PowerChina. These arrangements typically combine financing, construction and technology supply, reducing costs and accelerating execution timelines.

Their competitive advantage does not lie solely in costs. As journalist Jack Lo argued: “They’re more tolerant of risk and more flexible in practice. Going back to Las Bambas, what businessperson wants to invest in a venture full of problems, even if it’s one of the largest copper mines in the world? They take on the risk, adapt to local conditions, and if they see a chance to make money, they go after it anyway.”³⁰ This readiness to operate in environments characterized by political uncertainty, social conflict or institutional weaknesses has enabled Chinese companies to expand into sectors where other international investors tend to be more reluctant.

China’s presence is also visible in supply chains associated with the energy transition. Like all the other countries in the study, Peru relies heavily on solar modules and other components manufactured in China.

Despite their large presence in the electricity distribution sector, Chinese companies do not dominate the sector. Peru’s transmission infrastructure, one of the main bottlenecks for integrating new renewable energy, remains largely controlled by Colombian, Spanish and Brazilian companies such as ISA, Redeia, Acciona, Alupar and Atlantica.³¹ This diversification of operators limits the ability of any foreign actor to exert decisive influence over the long‑term planning of the system. Overall, China’s presence does not, by itself, redefine Peru’s energy transition, but it does amplify the tensions inherent in a model centered on resource extraction and limited state capacity. Rather than acting as a disruptive external force, China functions as an accelerator of dynamics already in place: sectoral concentration, dependence on strategic minerals and persistent governance vulnerabilities. Ultimately, Peru’s energy transition is shaped largely by foreign companies from multiple countries competing for market access, in combination with the country’s own political shortcomings and structural economic constraints.