The Latin American private infrastructure sector painted a mixed picture in 2025—marked by structural challenges and political uncertainty.

The LatAm and the Caribbean region posted its lowest deal count (370 deals reaching financial close) since 2018 (342) for a total of USD 88.12bn. This figure is trending down from the peak of 500 deals closing worth USD 92.47bn in 2021 and lower than the 414 transactions in 2024 totaling USD 113.5bn, according to Infralogic data. The largest transactions of the year were the USD 2.8bn Vaca Muerta Sur Pipeline Phase II project in Argentina and the USD 948m acquisition of Brazilian renewable energy firm Serena Energia by Ventos Alisios, a special purpose vehicle created by Actis, GIC, and Serena’s controlling shareholders Lambda Energia and Lambda II. Mexico saw very few projects with some 27 transactions totaling USD 5.8bn.

The pendulum of Latin American politics swung again across several Latin American and Caribbean countries that held presidential or general elections, including Bolivia, which saw the end of leftwing rule after many years; Chile, which elected a rightwing politician to succeed leftist Gabriel Boric; Ecuador; and Honduras. In 2026, the Latin American countries scheduled to hold major presidential or general elections are Brazil, Colombia, Costa Rica, Haiti and Peru.

Head of LatAm Infrastructure & Real Estate Investment Banking at JPMorgan Oliver Narro said a lot of deals this year were driven by a desire to realize portfolio monetizations ahead of looming election cycles.

“2025 was a very active year of both corporate and sponsor monetizations of LatAm portfolios,” Narro said.

“In general, it has been a low year,” said Jorge Valenzuela, principal and managing director, Advisory Services at ARUP, pointing out that the bulk of regional activity was concentrated in the Brazilian highway sector, some data centers, and select renewable projects in Brazil and Chile. Brazil saw 214 transactions in 2025, totaling USD 46bn. The real bottleneck, Valenzuela argues, is not investor appetite—which he describes as “enormous”—but the lack of well-structured projects. “Brazil is the only country right now with a truly interesting pipeline. Peru remains the eternal promise, Chile has a small but reliable pipeline, and Mexico is still waiting for clarity under its new administration.”

Core infrastructure assets continued to dominate investor attention, with airports and highways leading transport deals and renewable investment surging despite persistent grid constraints. Renewables, Narro added, were buoyed by rising energy demand from consumers and the growing power needs of artificial intelligence applications.

Digital infrastructure faced a temporary slowdown due to delays in 5G deployment and overbuilding but Narro, who has worked on digital deals for clients like Millicom and KKR, sees a rebound for the market in 2026.

Valenzuela said data centers are emerging as the next investment frontier, fueled by AI’s insatiable demand for computing power. “We’re seeing campuses that require two gigawatts of power—far beyond the 300 MW facilities just a few years ago,” he noted.

Narro said investors engaged in some financing strategies which were not present in the past. “Local providers of capital, SMAs [separately managed accounts], holding [company] and super holding financings are some of the new tools being utilized more frequently to minimize financing costs and optimize capital structure of transactions,” Narro said.

Investors leaned into sustainability through energy transition portfolios that balance renewable and non-renewable sources, a strategy aimed at mitigating risks like price volatility and curtailment.

Looking ahead, Narro expects potential interest rate cuts to unlock financing opportunities in 2026, especially for global debt products. But regulatory uncertainty tied to elections in Colombia, Brazil, Peru, and Chile remains a critical variable. “Investors will closely follow how candidates approach infrastructure agendas and potential regulatory changes,” he emphasized.

Valenzuela warns that 2026 will be “critical,” with elections across major markets and sovereign credit ratings shaping financing costs. His hopes for the new year include Brazil maintaining momentum, Mexico reopening to private-led energy projects, and political stability in Chile and Peru.

Chile: Stability amid regional flux

Chile’s infrastructure market delivered steady, if unspectacular, performance in 2025, Carlos Saieh, partner and CEO at Toesca, said. The country saw 11 M&A deals close in 2025—slightly below 2024’s 12 deals and way down from the 31 deals that closed four years ago, in 2021. “It’s very far from the boom years of 2021 and 2022,” Saieh said.

Juan Carlos Valdivieso, a leading advisor in energy and infrastructure at Morales & Besa, said, “2025 was better than 2024, but that doesn’t mean it was a great year. We saw positive trends, but always with the handbrake on.”

Valdivieso noted that investor caution ahead of the November presidential election slowed down activity, but there are positive signs suggesting more activity is coming. The incoming administration of president-elect José Antonio Kast—set to take office in March—has signaled plans to prioritize public-private partnerships (PPPs) and accelerate stalled projects. Key areas for the administration include hospitals, prisons, highways, and a port project in San Antonio.

Saieh expects a modest uptick in activity in 2026, contingent on macroeconomic conditions and political developments. “The change of government could generate some tailwinds and help dynamism,” he explained, adding that achieving lower interest rates will be critical to unlocking liquidity.

Renewable energy remains Chile’s most active sector, with growing interest in natural gas reversing years of declining appetite for hydrocarbons.

Battery storage projects dominated financing in 2025, Valdivieso said, with Global Infrastructure Partners-backed Atlas Renewable Energy closing deals for its Copiapó and Estepa projects. AES also secured funding for a major battery initiative, a solar facility in Pampas, signaling a trend likely to continue in 2026. Data centers are poised for a boom starting in 2026, driven by global tech demand and Chile’s energy resources, he said.

While permitting delays proved a major obstacle in 2025, according to Valdivieso, a new law passed in September aims to streamline approvals.

The new government is expected to focus on water infrastructure amid Chile’s worsening drought, with projects for reservoirs and desalination plants gaining traction. Toesca’s Saieh sees water infrastructure emerging as a hotspot, driven also by mining’s demand for reliable supply. “Everything related to water production and transport will be very active, with many greenfield projects,” he said.

A landmark PPP desalination project in Coquimbo recently attracted multiple bids, and its success could pave the way for similar initiatives nationwide, Valdivieso said.

On financing, Saieh noted a structural shift: “In recent years, there’s been a move from capital markets toward banks.” Private investment funds, he added, will play a secondary role, focusing on riskier structures like mezzanine loans rather than core project finance.

Interest rates remain a critical variable. Chile’s 10-year rate stands at 5.3%, down from pandemic-era lows of 2.5% but still historically high.

Saieh expects rates to decline in 2026 “by inertia of the cycle,” potentially reviving capital markets as a source of project debt.

Valdivieso expects banks to regain prominence in project financing as conditions normalize. “Banks never disappeared, but their activity slowed. We’re starting to see the pendulum swing back,” he said.

Among notable M&A transactions in 2025, Valdivieso cited GIP’s investment in AES assets, reinforcing confidence in Chile’s energy market. Other deals included ContourGlobal’s acquisition of a solar and battery portfolio from Grenergy.

Looking ahead, Valdivieso anticipates continued asset rotation by major players such as Enel and Acciona, though specifics remain under wraps. “We’re working on several transactions in transmission and generation that could close in the coming months,” he said.

Peruvian infrastructure’s strong finish

In a year in which Peru’s congress impeached another president, the Andean nation’s infrastructure market closed 2025 with steady progress made in public-private partnerships (PPPs), marked by key project awards and regulatory changes that could reshape the sector in 2026, according to leading infrastructure lawyers.

Isabel Lira, an infrastructure lawyer at local firm Miranda & Amado, described the year as “relevant but not exceptional” for PPPs. “ProInversión has managed to award a number of projects,” she said. “If you compare it with 2024, the numbers are not as strong, but I think it’s still good.”

“We come from prior years that were very slow,” she added.

Among this year’s highlights were the awarding of projects for Group 3 of the country’s Transmission Plan, the Longitudinal de la Sierra Section 4 highway, the Chincha wastewater treatment plant, and the Ancón industrial park. “Group 3 of the Transmission Plan is relevant. The Longitudinal de la Sierra, Section 4 is a project the state had been trying to award for years,” Lira noted. “We also saw the Chincha plant.”

Beyond new contract awards, Lira pointed to a growing trend of renewing mature concessions to unlock investment. Looking ahead, she expects energy—particularly transmission PPPs and private renewable generation—alongside water treatment and major road projects, to lead activity into 2026.

Diego Harman, a partner at international law firm Garrigues, highlighted the Peruvian infrastructure sector’s dynamism, noting that project financing activity increased significantly compared to 2024. “Energy—particularly solar generation—and traditional PPPs dominated activity this year,” he said.

Favorable regulatory conditions and declining costs boosted solar investments, while Proinversión’s proactive approach to awarding PPP projects played a critical role, he added. Harman expressed optimism for 2026: “Once the regulatory framework is finalized, investment in new generation projects will accelerate.”

Harman pointed to Law 32249 – Law to Ensure the Efficient Development of Electricity Generation – approved in January, as a milestone.

“This law aims to diversify Peru’s energy matrix, promote competition among all sources—including renewables—and enable technologies like solar to compete at night through battery energy storage systems,” Harman explained.

While digital infrastructure opportunities are clearer in markets like Chile, Peru still lacks clarity in this segment, Harman said. Transport projects remained an area of interest, but recent market attention has shifted towards social infrastructure, sanitation, and port development.

Oscar Trelles, a lawyer who coordinates M&A and Private Equity work at Cuatrecasas in Peru, also emphasized energy’s standout role in 2025, citing landmark deals such as Peruvian conglomerate Grupo Romero’s acquisition of Orygen and Zelestra’s portfolio sale to Colombia’s Promigas. “Peru presents a panorama with a state that is incentivizing investment and PPPs,” Trelles said. Looking ahead, he also expects transport and sanitation projects to dominate the pipeline, alongside energy and the emerging digital infrastructure sector. “If the next government is pro-investment, we could see a real takeoff,” he said, adding that a global trend towards interest rate cuts could ease financing conditions.

Despite political uncertainty ahead of the 2026 elections, all three lawyers remain optimistic. “The market expects a government that supports private investment,” Trelles said.

Colombia’s challenging year

The current Colombian government promised in August to close six railway deals before the end of 2025 but awarded only the COP 2.27tn (USD 608m) La Dorada – Chiriguaná railway project. The government continues to work on the Corredor Interoceánico, Corredor Pacífico —Yumbo–Caimalito, Corredor del Pacífico — Buenaventura–Palmira, Villavicencio–Puerto Gaitán, Conexión Bogotá Región to Férreo Central corridor, and on the Corredor Bogotá–Belencito railways. However, Sacyr Concesiones secured COP 3.66bn in financing for the Buenaventura – Loboguerrero – Buga road corridor concession.

Broadly speaking, Colombia’s infrastructure sector faced a difficult year, especially the energy sector, which was impacted by regulatory hurdles and a lack of new grid connection points, according to Manuel Gómez Fajardo, a Colombian energy lawyer at international firm Cuatrecasas.

He described the year as “very difficult,” largely due to delays by the Unidad de Planeación Minero Energética (UPME) in assigning connection points for new projects—a bottleneck that has persisted since May 2024. This constraint slowed the development of projects reaching “ready to build” status, a critical milestone for investors.

Despite these obstacles, significant mergers and acquisitions took place, he said. National energy company Ecopetrol, under a mandate from President Gustavo Petro to pivot toward renewables, acquired portfolios from companies exiting the market, including assets from Enerfin and projects in La Guajira previously owned by Enel. Ecopetrol’s strategy focuses on self-generation for internal consumption and reducing carbon emissions, given regulatory restrictions prevent it from becoming a traditional generator, Gómez Fajardo said.

Other notable transactions included Erco’s acquisition of Colombia’s second-largest solar project, a 285 MW facility, signaling growing interest from infrastructure investors in renewable opportunities amid limited opportunities in transport projects. In June, Sacyr agreed to sell its entire stake in a portfolio of operational toll roads in Colombia to Actis for USD 1.6bn.

On the financing front, partnerships such as AES’s joint venture with Ecopetrol to develop projects in La Guajira and biomass initiatives by EDF in Casanare are moving forward. Atlas, which secured funding for its Shangri-La project in 2025, is also arranging financing for a new 100 MW project, Gómez Fajardo said. He noticed a shift back to debt financing in 2025 after seeing a lot of equity-heavy deals during the recent period of sustained high interest rates.

Looking ahead, Gómez Fajardo said the recently issued Decree 1091 of 2025, which seeks to stablish clear guidelines for long-term contracting of generation, storage, transmission, distribution and energy projects, could reshape the landscape by establishing a framework for long-term energy contracts, potentially including storage components. He said the decree could spur new opportunities in 2026, though much will depend on political developments and regulatory clarity.