...Economic Slowdown Affects Demand: Electricity demand in Latin America is highly correlated to economic performance, and the expected slowdown in the region's economic growth will curb electricity demand in the medium term. This will have a mixed impact in the region, as countries with tightening reserve margins would welcome a slowdown in demand growth, and those that are expanding capacity would not, as it could depress electricity prices. High Near-Term Hydrology Risk: The ongoing low precipitation in most of Latin America caused by a meteorological phenomenon known as El Ni±o has a marked impact on generation, as approximately 57% of electricity in the region comes from hydroelectric plants. This risk has been mitigated in some countries by higher thermoelectric generation and lower global hydrocarbon prices. Depreciation Heightens Political Risk: The appreciation of the U.S. dollar against most Latin America currencies could increase electricity costs for end users in countries with...
